Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

LONDON UNDERGROUND (SAFETY MEASURES) BILL [Lords] ( By Order)

Order for Third Reading read.

To be read the Third time on Tuesday 15 October.

KING'S CROSS RAILWAYS BILL ( By Order)

Order for consideration, as amended, read.

To be considered on Tuesday 15 October.

EAST COAST MAIN LINE (SAFETY) BILL (By Order)

Order read for resuming adjourned debate on Question [13 May], That the Bill be now read a Second time.

Debate further adjourned till Tuesday 15 October.

KING'S CROSS RAILWAYS BILL

Motion made,
That the Promoters of the King's Cross Railways Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session?
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to he upon the Table;

That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
That these Orders be Standing Order of the House.—[The Chairman of Ways and Means.]

Hon. Members: Object.

BRITISH RAILWAYS (No. 3) BILL [Lords]

Ordered,
That the Promoters of the British Railways (No. 3) Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office no later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;

Ordered,
That, if that Bill is brought from the Lords in the next Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;

Ordered,
That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);

Ordered,
That the Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;

Ordered,
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;

Ordered,
That, in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words 'under Standing Order 126 (Reference to committee of petitions against Bill)' were omitted;

Ordered,
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;

Ordered,
That these Orders be Standing Orders of the House—[The Chairman of Ways and Means.]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Caribbean

Mr. McAllion: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next intends to visit Cuba to discuss security in the Caribbean.

The Minister of State, Foreign and Commonwealth Affairs (Mr. Tristan Garel-Jones): My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has no plans to do so.

Mr. McAllion: I am sure that the Secretary of State regrets that answer almost as much as I do. Does the Minister of State agree that the only basis for security in the Caribbean is respect for the sovereign independence of all the countries in that area? Will he therefore join me in deploring the US-backed campaign of destabilisation against the Government of Cuba? Will he tell the Americans that their proper role in the Caribbean is not to break international law and undermine legitimate Governments but to show respects for those Governments by entering into constructive dialogues with them on the way forward towards peaceful coexistence?

Mr. Garel-Jones: The United States is not using or threatening to use force against Cuba. In May, President Bush laid down the conditions for improvements in relations in a message to the Cuban community of Miami. He said that Cuba should hold fully free and fair elections under international supervision. I recognise that Fidel Castro and his regime remain a constant attraction to the hon. Gentleman and many of his hon. Friends. After all, he is the last remaining member of what might be called the international Militant Tendency who has not allowed his membership to lapse.

Mr. Forman: Would not one of the best contributions to greater security in the Caribbean—this is a point that my right hon. Friend could easily make were he to visit Cuba—be for the Soviet Union, now that the cold war is over and so-called peaceful coexistence is a thing of the past, to wind down its excessive aid of all kinds to Cuba, which still includes some military assistance?

Mr. Garel-Jones: It will not surprise the House to know that the Soviet Union is reassessing not only its position internally but its relationship with Cuba. Opposition Members should start to do likewise.

Southern Africa

Rev. Martin Smyth: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has held recently with other southern African leaders, in addition to the African National Congress, the Pan-Africanist Congress, Inkatha leaders and the President of South Africa.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): In recent months I have met President Mugabe of Zimbabwe and Dr. Savimbi of

Angola. During my recent visit to South Africa I met a range of leaders, including some from the Democratic party.

Rev, Martin Smyth: I welcome the conversations that the Secretary of State has been having. However, if he has been meeting a range of leaders, from the ANC to Dr. Savimbi, does he agree that it may be time that Ministers met people such as President Mangope of Bophuthatswana, on the ground that moderate people as well as those who engage in terrorism should be listened to?

Mr. Hurd: I agree that a wide range of opinion is necessary and I have thought about the hon. Gentleman's point. The trouble is that Bophuthatswana is a product of a so-called grand apartheid policy which we have never accepted and it would not be sensible for Ministers to meet its president at a time when that whole policy is being changed.

Sir Peter Blaker: Would my right hon. Friend care to tell the House his reaction to reports that the South African Government have been giving aid to Inkatha at the expense of the ANC?

Mr. Hurd: Like everyone in the House, I am troubled by those reports. This morning I telephoned the South African Foreign Minister and spoke to him for more than half an hour to express our concern. I urged that the South African Government should be clear and open about what had occurred and that for the future they should make it clear that old policies had been discarded and that the policing of the country would be politically impartial and effective. In reply, Mr. Botha assured me that there had been no connivance by the South African Government at violence in the townships originated by Inkatha or anybody else.

Mr. Robert Hughes: Although the Foreign Secretary and I may disagree on many things, does he at least agree that it is absolutely imperative for the peace process to proceed? That being so, will he go even further than his conversation this morning with the South African Foreign Minister and say clearly to President de Klerk that the covert funding of Inkatha and the covert and overt collusion by the police and defence forces in the violence in the townships greatly endanger the peace process and must stop? Will he make it clear that there will be no question of this country or any other lifting sanctions until this process is completely clear?

Mr. Hurd: It is certainly true that there has been a setback to confidence in the process which, as the hon. Gentleman rightly says, must proceed, because there is no alternative. As I have said, it is important for the South African Government to be clear about the past and they must re-establish confidence about the future policing of the country.

Mr. William Powell: My right hon. Friend may be aware that his answer to the supplementary question by the hon. Member for Belfast, South (Rev. Martin Smyth) will be received with some disappointment in parts of South Africa. Would not my right hon. Friend consider it appropriate for members of his staff in the embassy in Pretoria to talk to Bophuthatswana and the other South African homelands, if only to tell them that their future


very much depends on the political settlement that must be made in South Africa in due course and that they must join in the process?

Mr. Hurd: I welcome the opportunity to make that clear, but I am not sure that talks are needed to do that. Plainly, the future of the people living in the so-called independent homelands must be considered together with the future of all South Africans.

Mr. Kaufman: Does the right hon. Gentleman agree that the revelations that have been admitted and which have caused great perturbation within the South African Government, about their funding of Inkatha, must cast a very worrying light on the good faith of the South African Government in their negotiations with the African National Congress? The Foreign Secretary's response to my hon. Friend the Member for Aberdeen, North (Mr. Hughes) was simply not precise enough. Does not he now agree that it would be folly precipitately to lift sanctions as long as the good faith of the South African Government remains in doubt?

Mr. Hurd: I am sure that we have been right to move on sanctions in the way that we have. We are talking not about the rewarding of this or that party, but about nation-building in the new South Africa. Anyone who has been to the townships, as I did recently, sees what needs to be done; that can be done only by investment which, in turn, can come only from economic growth. That is as plain as a pikestaff.
The right hon. Gentleman asked about the financing of Inkatha. Such funding as has so far been declared and admitted belongs to an earlier stage and was brought to an end in the early part of last year. Much more serious are the allegations of connivance with violence. When I was in South Africa, Mr. Mandela spoke to me with clearly genuine passion on the subject. That is why it is crucial for the South African Government to repeat the assurance that was given to me today that they have not connived at such violence. It is also crucial that the policing of the country should be in a different tradition from that which President de Klerk's Government inherited.

South Africa

Mr. Anthony Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs what contribution Britain is making towards encouraging increased educational opportunities for black people in South Africa.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): Of our growing bilateral aid programme for black South Africans of more than £9 million this year, about 70 per cent. is being spent on initiatives to increase educational opportunities for black people. Those include some 1,200 bursaries for black students attending tertiary courses in Britain and South Africa. We are also running programmes in South. Africa to improve the teaching of basic literacy, English, mathematics and science.

Mr. Coombs: Will my right hon. Friend confirm that although the adult literacy rate in South Africa is, at 71 per cent., almost double that in the rest of the African continent and although spending on education for black South Africans has risen by about 30 per cent. per year in

the past 10 years, compulsory schooling for children in South Africa is still not mandatory? Will Her Majesty's Government press the South African Government on that? What other measures do the Government have to improve the training of black South Africans upon which their economic and educational development depends?

Mrs. Chalker: We regard the education of all South Africans as imperative, particularly those black South Africans who have for so long been denied education. The South African Foreign Minister and I discussed that earlier in the year. We are also increasing the amount of help that we give to the technikons, the technical colleges, because so many young people there need the technical ability to apply the knowledge that they have gained. I particularly praise the Peninsula technikon and the others to which we are giving many bursaries.

Mr. Hain: I welcome the Minister's statement on educational provision, but will she condemn in forthright language the behaviour of South African Cabinet Ministers who have organised millions of pounds of slush money to divide and destroy and to create conflict in the black community and have, with the same objective, promoted shadowy forces within the South African defence force and the peace force? Does she agree that President de Klerk's reputation as a man of credibility and honour has been destroyed by that shadowy episode?

Mrs. Chalker: We have no reason to believe that President de Klerk is not entirely serious and direct in carrying out his promised reforms. There is no doubt that he has to tackle a legacy of apartheid. He has to obtain the agreement of all parties on a new constitution. On the particular matters that the hon. Gentleman raises, I have nothing to add to what my right hon. Friend the Foreign Secretary said other than to say that there is an urgent need to help black South Africans with investment for their education and jobs—and that we shall do.

Mr. Speaker: I remind hon. Members that this question is about educational opportunities.

Mrs. Ann Winterton: Is my right hon. Friend aware that one of the major stumbling blocks to members of the black communities taking up educational opportunities is the fact that they have to be taught and have to learn in three different languages—initially, quite properly, in their mother tongue and then in Afrikaans and English? Will she use all her influence to ensure that English, being an international language, is treated as the main language in South Africa? Will she further ensure that we give all the technical help that we can towards education so that members of the black communities can use that technical knowledge in assisting the future of their country?

Mrs. Chalker: As my hon. Friend will be aware, I cannot insist on what is taught, but, as all our help is for basic literacy and for the teaching of English, mathematics and science, as I said in the main answer, she can be assured that, in total co-operation with the South African Government, we are doing our best to enhance the teaching of English from the earliest possible age, because that is the language which South Africans, black and white, will need in the international world of the future. My hon. Friend will have heard what I said about technical education in answer to an earlier question.

Mr. Grocott: Does not the Minister understand that what is fundamentally required in South Africa is not any number of well-meaning and well-intentioned developments for the social system, but the right of black people to vote? That is what the demand has been for the last quarter of a century. Any statement about apartheid being at an end is meaningless until they have that opportunity.

Mrs. Chalker: As you reminded us, Mr. Speaker, this question is about education. Anybody who has seen the lack of education facilities in the townships will know why we believe that education is absolutely crucial. Of course, the next stage is constitutional talks and we shall do all that we can to foster them.

Conference on Security and Co-operation in Europe

Mr. Atkinson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the forthcoming CSCE conference in Moscow on the human dimension.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): We plan to send a delegation to the CSCE conference in Moscow on the human dimension, subject to developments in the Soviet Union between now and September. Participation in the conference would enable us to press for further improvements in the human rights issues that cause us concern.

Mr. Atkinson: As the conference is less than seven weeks away, will my hon. and learned Friend confirm that he has received cast-iron assurances from the Soviet authorities that representatives of the international human rights organisations and other non-governmental organisations will enjoy the same access to this conference as they did in Copenhagen last year? Is he aware of recent worrying reports that several established Soviet human rights organisations have been told that they will not have access to the conference?

Mr. Hogg: I cannot give my hon. Friend the confirmation that he seeks, but, like him, I attach considerable importance to the openness of the conference. It is very important that NGOs should have same free access to the conference and to the delegates as they had in Paris and Copenhagen. We shall continue to press the Soviet Government on that point and to monitor their response.

Dr. Kim Howells: Does the Minister agree that there is no more important human dimension to our relationship with the Soviet Union and the newly democratised countries of Poland, Czechoslovakia and Hungary than ensuring some political stability, which will derive from economic stability and from the changes that we all hope will be made sooner rather than later? Does he further agree that more needs to be done to ensure that the Russians are able to buy the food surpluses of Poland, Hungary and Czechoslovakia and that by helping the Soviets we shall solve many problems at one stroke?

Mr. Hogg: I certainly accept that we shall not achieve long-lasting political reform in any of those countries, especially in the Soviet Union, without sustainable economic improvement. One cannot speak of western countries placing large sums of money in, for example, the

Soviet Union. We have a role in integrating the Soviet Union into the western economy, in transferring information and technical know-how and in encouraging investment. But we must be certain that the Soviet Union not only intends to carry out the economic restructuring that is necessary but is in a position to do so.

Sir Michael Marshall: In the work of the CSCE on human rights, will my hon. and learned Friend assure me that he will continue to watch closely the development of the CSCE parliamentary assembly and its relationship with the Inter-Parliamentary Union, which has much expertise on human rights?

Mr. Hogg: I agree with my hon. Friend and I can give that commitment.

Mr. Robertson: In forming a judgment on human rights in the Soviet Union, does the Minister accept that legal civil rights are an important test—but only one test—of human rights in that country? Equally important are people's ability to vote in elections and the construction of a parliamentary process and of lasting democratic institutions. In that context, will the Minister explain why the valuable initiative that was launched by the Foreign Secretary more than a year ago to create a foundation that would allow the British political parties to work with and help the new democracies in the Soviet Union and central and eastern Europe has achieved absolutely nothing? Many other countries have been successfully involving themselves, to their great benefit.

Mr. Hogg: We have put much work into the creation of the institution that the hon. Gentleman has in mind. Indeed, we have a fairly elegant creation of our own in mind. There is a little more work to be done to it. I look forward to being in a position to reveal it, but if Opposition Members suppose that they will have public moneys to dish out to their friends they have another think coming.

Mrs. Currie: Am I right in thinking that, as the economy of the Soviet Union goes into substantial collapse, two features of that country are still intact? One is the red army and the other is the KGB, which seems to be spawning clones in other republics in the Soviet Union. Now that the central Government is much weaker, can my hon. and learned Friend guide us as to who is in charge of those institutions and whose finger will be on the nuclear button in the 1990s?

Mr. Hogg: We are seeing a fundamental transition of power in the Soviet Union. Over the next 10 years or so, there will be a complete change in the shape of that country. I should be surprised if all the constituent republics remain within the union. I am sure that much power will be devolved to the republics. That will inevitably dilute the authority and power of the KGB and the red army.

British Virgin Islands

Mr. Andrew F. Bennett: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has had any recent discussions with representatives of the British Virgin Islands.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): I


had discussions with the Honourable Lavity Stoutt, Chief Minister of the British Virgin Islands, when he visited London in March 1991 and also when I visited the BVI between 20 and 22 May.

Mr. Bennett: Will the Minister confirm that there was no consultation with the elected representatives about the appointment of the new governor? Is that the right way for the Government to behave?

Mr. Lennox-Boyd: Consultation took place with the locally elected representatives. I know the governor-designate, Mr. Peter Penfold, well. He has a supreme qualification for that appointment, in that he is personally committed to and fond of the Virgin Islands and is committed to their welfare and progress. I hope that he receives a warm reception when he goes to the islands.

Kurdish Leader

Mr. Campbell-Savours: To ask the Secretary of State for Foreign and Commonwealth Affairs when he plans to meet Mr. Talabani.

Mr. Hurd: We remain in close touch with the Iraqi Kurdish leadership. I have no plans to meet Mr. Talabani at present, but my right hon. Friend the Prime Minister hopes to meet him later this month.

Mr. Campbell-Savours: When Ministers meet Mr. Talabani, will they make it clear that the only reason why London and Washington are considering partially raising sanctions is that the western powers have failed miserably to fund properly UNICEF's programmes of humanitarian relief in Iraq under resolution 688? Instead of partially raising those sanctions, would not it be far better to defreeze Iraq's multi-billion dollar assets in the west and use those resources to fund Iraq's requirements for humanitarian relief?

Mr. Hurd: 'That is a highly complicated question, as the hon. Gentleman knows. There are many claims on the assets. The point that we are trying to tackle arises from the reports of Prince Sadruddin and others about shortages of food and medicines in Iraq. There are no sanctions on sending to Iraq, through the sanctions committee, medicines or food for humanitarian purposes, but the question is how they should be paid for. If we can devise—it is still an "if" —a scheme by which a limited amount of oil revenue can be spent and the proceeds fully devoted to that purpose, that is worth considering.

Mr. Bellingham: When my right hon. Friend meets Mr. Talabani, will he remind him that, had it not been for the decisiveness shown by my right hon. Friend the Prime Minister and by my right hon. Friend, the allies' humanitarian aid effort would not have got off the ground? Obviously, that aid has saved thousands of lives. What aid is going to the Kurds to help them to rebuild villages in their territory?

Mr. Hurd: A lot of help is going through the United Nations to the Kurds in the north of Iraq. We have not ended our efforts to reassure them. As my hon. Friend knows, a small allied rapid reaction force remains in Turkey. Yesterday, I had discussions in Ankara with President Ozal about that matter and I am satisfied that the arrangements for that force, with Turkish participation, are well in hand.

Mr. Winnick: Was President Bush absolutely right when he said that the international community's quarrel is with the criminal dictator who rules Iraq, not with the people? Is not it essential to try as much as possible to give aid and assistance so that millions of people do not suffer even more? What effective steps can be taken so that the partial lifting of sanctions helps the people of Iraq rather than the criminal dictator's war machine? As long as Saddam Hussein remains in power he will present a great danger to the neighbouring states.

Mr. Hurd: The answer to the hon. Gentleman's question, which is a valid one, is to devise a scheme—if we can—that ensures that the total of any proceeds from a limited sale of oil goes to purposes approved by the United Nations and that it is not left to the whim or discretion of the Baghdad regime.

South Africa

Mr. Robert G. Hughes: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps Her Majesty's Government proposes to take to assist towards progress in achieving democracy on a non-racial basis in South Africa.

Mr. Hurd: We will continue to encourage all parties to begin talks on a new constitution for South Africa as soon as possible. We are helping the black opposition parties to take part in shaping the new democracy.

Mr. Hughes: I thank my right hon. Friend for that answer. Recalling what he has already said this afternoon —that a movement towards democracy in South Africa has to be underpinned by an expansion in its economy —does he agree that if sanctions against South Africa are to be progressively lifted and if the country is to have access to international funds, the time available to the South African Government is not extensive—indeed, it is limited? It depends on what they do inside their country whether the international community continues to have faith that the South African Government will produce the democracy that we all want.

Mr. Hurd: I agree. What has happened so far is that the legal pillars of apartheid have been abolished. What now has to happen is multi-party constitutional talks to move towards a democratic constitution on the basis of one man one vote. At the same time, South Africans have to begin building a new nation and coping with the legacy of apartheid and all the poverty that went with it. That is the argument for investment, for economic growth and for wellwishers towards black South Africans encouraging, from now on, the building of a new nation—instead of thinking of new punitive measures.

Mr. Tony Banks: Does not everything revolve around achieving one person one vote in South Africa? Will the Foreign Secretary admit that until universal suffrage is achieved in South Africa and blacks have the vote there can be no question of dropping sanctions or of admitting South Africa to the civilised community of nations?

Mr. Hurd: I disagree. One man one vote is the basis on which state President de Klerk is proceeding—that is the purpose of the constitutional talks—but saying that there should be no investment and no growth between now and then would mean that on the day when there is one man


one vote in South Africa the country will be impoverished way beyond what is necessary. It is now and not then that we and the South African Government should start rebuilding South Africa.

Sir George Gardiner: Will any aid that the Government give to any party or racial group in South Africa be made conditional on that party or group remaining part of the constitutional talks to achieve democracy in that country?

Mr. Hurd: Certainly, the help that we give in the political process is designed to equip those whom we are helping to take part in the democratic process. That is the whole purpose of it.

Mr. Anderson: The Foreign Secretary has recently travelled in South Africa. If he had opened his ears he would surely have heard that the effectiveness of any contribution that we can make to democracy-building has been much undermined because of the British Government's total identification with the white minority Government. Will he now seek to reduce some of that considerable damage to British interests, first by consulting the representatives of the majority in South Africa and, secondly, by ensuring that Britain does not take the lead in the EEC and in the Commonwealth in the destruction of sanctions?

Mr. Hurd: I sometimes wonder why nice people like the hon. Gentleman persist in living in such a time warp where South Africa is concerned. He can have no conception of what Mr. Mandela and other ANC leaders have told me and many others about the British aid programme in South Africa which, at £9·5 million, makes us the biggest donor of the lot. The money is overwhelmingly devoted to helping young people, especially in the townships. I have been warmly thanked for that. Of course, we consult the ANC about where it should go and when the ANC told us that it was time to relax the sporting sanction against cricket, we went along with it and helped it to achieve that.

Mr. Colvin: Does my right hon. Friend agree that as he attaches so much importance to these constitutional talks, it is extremely important that the state of Bophuthatswana participates in those talks, whatever he may think of the status of that state? Surely, if he wants to see what South Africa may be like after reaching the free society of non-racial democracies, he has to go no further than Bophuthatswana, which has been free of apartheid for many years.

Mr. Hurd: I do not think that many people would accept that Bophuthatswana is the model for the future of South Africa. I have no disrespect for its leader and there is nothing personal in this, but, for the reasons that I have already given, I do not believe that it would be right to enter into conversations with him.

Dalai Lama

Mr. Eastham: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will now meet the Dalai Lama.

Mr. Lennox-Boyd: My right hon. Friend has no plans to do so.

Mr. Eastham: May I express my appreciation to the two diplomats who visited the Drapchi prison in Tibet to see 89

political prisoners? As the Chairman of the Select Committee on Foreign Affairs has recommended that we recognise the Dalai Lama as a marker for peace, democracy and human rights, conditions which could hardly be said to exist in China at present, why do not the Government change their policy?

Mr. Lennox-Boyd: We, too, are grateful to the two British diplomats who visited Tibet in July. They visited the prison in question, but were unable to meet any prisoners. More generally, they commented that there was severe resentment among Tibetans about the presence of Chinese, but there were no obvious signs of tension on the streets of Lhasa. Of course, we raise the subject of human rights with the Chinese at every possible opportunity. For example, my right hon. Friend the Secretary of State emphasised our concern to the Chinese Foreign Minister and the general secretary on a visit to China in April. However, the Dalai Lama has no plans to visit Britain at present so the hon. Gentleman's question is hypothetical.

Mr. Adley: While the cultural revolution throughout China in the 1970s was quite ghastly, does my hon. Friend recognise that the few of us who have recently been to Tibet—I can see only one of them in the Chamber now —saw no sign of tension in the streets of Lhasa? Furthermore, contradictory to the propaganda put out by the Dalai Lama, there was visible and open observation of the Buddhist religion on every street corner. Therefore, will my hon. Friend continue to rely on the advice from our embassy in Peking about the best way to deal with these sensitive matters?

Mr. Lennox-Boyd: Naturally, we listen to the advice of our embassy in Peking. We are concerned deeply about human rights violations and we take the opportunity to make our concern clear to the Chinese on all suitable occasions and at the United Nations.

Dr. Godman: Is it the Government's considered view that the Dalai Lama will never be allowed to return to his country? Is it not time that the United Nations, the European Community and the leaders of the advanced industrial nations stood up to the nasty, vicious old men in China who have inflicted such brutal outrages against the people whom that man so nobly leads?

Mr. Lennox-Boyd: Of course, the question of the Dalai Lama's return to Tibet must be a matter for discussion between the Dalai Lama and the Chinese. The Chinese have offered to talk to the Dalai Lama, but, at present, they have set conditions with which the Dalai Lama is not happy. That impasse has to be resolved. We continue to encourage the Chinese to talk and we believe that dialogue offers the best solution.

Mr. Foulkes: Is it not sad that although you, Mr. Speaker, the Leader of the Opposition, the Prince of Wales, the Pope and now—

Mr. Hurd: And the Lord Chancellor.

Mr. Foulkes: All right, and the Lord Chancellor, and now President Bush have met the Dalai Lama that the Prime Minister had neither the sense nor the courtesy to do so? Will the Minister ensure that when the Prime Minister goes to Beijing as the first European head of state to do so


since Tiananmen square he protests not only about violations of human rights in China, but about the clear violations of human rights in Tibet?

Mr. Adley: indicated dissent.

Mr. Foulkes: The hon. Gentleman denies it, but The Guardian on Monday quotes the American ambassador in Beijing as saying during his visit to Lhasa that the Government's presentation of prison conditions in Tibet was as phoney as a $3 bill. We must protest about that.

Mr. Lennox-Boyd: My right hon. Friend the Prime Minister has been in touch with the Dalai Lama who wrote a letter of congratulation to him on his election as leader of the Conservative party. The programme of my right hon. Friend's visit to China has not yet been finalised, but I have no doubt that human rights will form a part of his discussions with the Chinese leaders.

Sir David Steel: Is the Minister aware that when the Dalai Lama was here he reiterated to those of us who met him that his wish was merely to return to Tibet as the spiritual leader of his people without any claim for international autonomy for Tibet? In those circumstances, why do Ministers continue to refuse to meet him?

Mr. Lennox-Boyd: The Dalai Lama is not planning to visit the United Kingdom at present. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) said that President Bush had met the Dalai Lama. When President Bush did so, he emphasised the fact that the Americans regard Tibet as part of China. Those who press for such a meeting should consider whether it should be on the same terms.

Iraq

Mr. Strang: To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate he has made of the number of children under the age of five in Iraq who are likely to die of starvation or disease in the absence of additional humanitarian assistance.

Mr. Douglas Hogg: The report of the latest United Nations mission to Iraq estimates that 300,000 children below the age of six are malnourished. We have repeatedly stated that we have no quarrel with the Iraqi population. It is, however, the responsibility of the Iraqi regime to co-operate fully with the United Nations and thereby ensure that relief is brought to those in need.

Mr. Strang: But surely the Government are not going to turn their back on the dying children in Iraq? The Minister and his right hon. Friend are humane men and they well know that the British Government have United Nations authority to unfreeze Iraqi assets in this country. Why do they not do so and establish with the United Nations agencies on the ground in Iraq a mechanism to ensure that the money is used to avoid human starvation, suffering and death?

Mr. Hogg: There are two issues wrapped in that question. The first is that of Iraqi assets in United Kingdom jurisdiction. We have made it plain that while Mr. Richter is held in custody in Baghdad we can not agree to a release of the assets held in the United Kingdom. As

for the report of Prince Sadruddin, he is recommending that there be a sale of oil under the provisions of article 23 of resolution 687. We shall reflect on that.
There are two important points to be dealt with: first, that the money goes into a United Nations account and is disbursed in accordance with the wishes of the Security Council and, secondly, that if food is purchased it is distributed in an even-handed way. We shall come to a final conclusion when we determine whether those specific provisos are capable of being met.

Mr. Ian Taylor: Will my hon. and learned Friend remind the House that if there is any suffering among the children in Iraq it is because of the brutality of Saddam Hussein and his complete insensitivity to the well-being of his people? If there were to be any arrangement which would allow the Iraqis to purchase foodstuffs and other supplies for their people, could my hon. and learned Friend assure the House that it would be done within the organisation of the United Nations so that no money purported to be destined for the children gets into Saddam Hussein's hands?

Mr. Hogg: My hon. Friend makes an important point. We have quite a lot of evidence about the state of affairs in Iraq, and I can tell the House that one group of people that is not suffering from malnutrition is Saddam Hussein and the Ba'ath party. Privation is focused on the ordinary people of Iraq. Resolution 687 relaxed restrictions on the import of food, humanitarian necessities and medicines —which were never covered by the sanction regime. It is important to ensure that if oil is sold moneys thus released are used only for purposes of humanitarian relief and, to some extent, for other approved purposes, such as the special commission, the demarcation commission and the compensation fund.

Mr. Sillars: How long will the United Kingdom take to reflect on the sale of oil, bearing in mind that every day probably costs the lives not only of children but of men and women as well? What is the position of other members of the Security Council on this period of reflection?

Mr. Hogg: We shall come to a very early conclusion.

Sri Lanka

Mr. Pawsey: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Sri Lanka.

Mr. Lennox-Boyd: We have supported the Sri Lankan Government in their efforts to overcome terrorism, but have also made very clear our concerns that all parties must respect human rights. Our response to Sri Lanka's unwarranted expulsion of our high commissioner has been to cancel high-level visits, further restrict arms sales and delay consideration of major new aid commitments. We will review these policies once a new high commissioner is in place.

Mr. Pawsey: I thank my hon. Friend for that typically helpful and detailed response. I take on board what he says about the importance of human rights, but can he suggest when a high commissioner will be reappointed to Sri Lanka? Can he also say when we might resume the provision of development aid to that island?

Mr. Lennox-Boyd: I am grateful to my hon. Friend for his support for our human rights policies. A new high commissioner will be appointed in the very near future, but I cannot say when. He will, of course, continue to make representations of the kind made by Mr. Gladstone. We have not cut off aid; we have merely reconsidered one £3 million tranche of aid that was under consideration. Aid already in the pipeline, and already being spent in Sri Lanka, continues.

Mr. Faulds: Would not it be appropriate if hon. Members expressed their strong approval of the stand taken by David Gladstone, our former high commissioner, on the appalling abuses of human rights in Sri Lanka? I hope that the House will endorse that.

Mr. Lennox-Boyd: I am grateful to the hon. Gentleman and very much support what he says.

Middle East

Mr. Cyril D. Townsend: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Britain's contribution to finding a diplomatic and peaceful solution to the Palestinian-Israeli conflict acceptable to the international community.

Mr. Hurd: We have been second to none in our support for Mr. Baker's initiative. We have urged all concerned to show flexibility. We welcome the constructive Arab responses to President Bush and Mr. Baker, and my right hon. Friend the Prime Minister had an excellent discussion on the subject with President Mubarak this morning. I encouraged the Israeli Foreign Minister, Mr. Levy, when I met him on 18 July, to seize this opportunity for progress towards peace.

Mr. Townsend: Does my right hon. Friend agree that we have the best opportunity for settling the vexed Palestinian-Israeli problem that we have had since the previous round of fighting between the Israelis and the Arabs, and that it is therefore essential for the United Kingdom and our European Community partners to pull out all the stops to encourage a long-term peaceful settlement? Does my right hon. Friend also accept that the Syrians, several other Arab countries and the Palestine Liberation Organisation have made genuine concessions, and that the international community is entitled to look to the Israelis to make similar concessions shortly?

Mr. Hurd: I agree with my hon. Friend. We are now waiting for the considered Israeli response to the new situation and, in particular, to the Syrian President's response to President Bush. There is a chance here. The Israelis have within their grasp something for which, quite legitimately, they have been aiming for 40 years—an opportunity to sit down and talk peace and negotiate their disputes with those of their Arab neighbours who are still at war—still belligerent—with them. But of course, at the same time, the Israelis have to discuss with representatives of the Palestinians the problems of the occupied territories.

Mr. Janner: Has the Minister seen the reports this morning to the effect that Prime Minister Shamir compared President Assad's response to the Baker initiative with the response of the late President of Egypt when he came to Jerusalem? There is therefore hope of movement. Recognising that President Assad has total

control in his country and is in fact a military dictator making his own decisions, whereas the Israeli Government is democratically elected—even if some of us would not have voted for them, just as we would not have voted for the Government here—does the right hon. Gentleman agree that the best way that we can help is by understanding the sensitivities of the Israeli Government and of the people who desperately want peace?

Mr. Hurd: I have always tried to do that, and the talk I had with the Israeli Foreign Minister last week was an example of both of us trying constructively to understand the view of the other. The hon. and learned Gentleman makes a fair point.

Mr. Temple-Morris: Will my right hon. Friend accept congratulations thus far and will he further commend Secretary of State Baker for his painstaking shuttling in an effort to achieve peace in the region? Does my right hon. Friend agree that, to get Israel to the conference table—and, more important, to keep her there—the continuing application of United States pressure is absolutely essential?

Mr. Hurd: I am accepting no congratulations, but I agree with what my hon. Friend said about James Baker. The energy and persistence that he has shown in the face of occasional discouragement are not only worth praising but, as my hon. Friend said, absolutely essential. I have never supposed that other pressures—whether by Europe or by Arab countries—can be an adequate substitute for the sustained energetic interest of the United States in achieving a settlement.

Mr. Ernie Ross: Has the Foreign Secretary had a chance to study the report of the Select Committee on Foreign Affairs that came out this morning? If he has—as I have—was he shocked to read, in part IV, which is headed "Obstacles to Regional Stability" that the Committee identified Islam as such an obstacle without in any way separating Islam from fundamentalism? Does he not think that, given that the report will be studied, that is at least a regrettable mistake, and that it will be compounded by the fact that there is no mention of Jewish fundamentalism which clearly threatens the area and the Israeli Government?

Mr. Hurd: I looked quickly at the report, but I did not happen on that particular phrase. It is not a matter for me. The hon. Gentleman will have to take it up with the Chairman and members of the Select Committee.

Mr. Dykes: May I thank my right hon. Friend for his robust efforts in trying to bring the Israelis and the Palestinians together at long last under a true peace treaty, which is now within their grasp and within the grasp of the whole international community? Does my right hon. Friend agree that money does, indeed, come into it, in the sense that the entire world community would, I am sure, favourably and positively consider the question of economic assistance to a near-eastern common market of all those countries if a true peace treaty were eventually attained?

Mr. Hurd: Yes, indeed, and of course the tragedy is that, although this is an area rich in resources, those resources are not properly used for the benefit of the people, not least because of the persistence of this poisonous dispute. Although particular help may be


needed in particular matters, once the dispute is settled, the resources are there to make the area one of the most prosperous parts of the world.

Mr. Kaufman: I pay the warmest tribute to the efforts of Mr. James Baker, which have been indefatigable and determined and which have quite certainly brought about the greatest possibility of a middle eastern peace settlement since the 1940s, but does the right hon. Gentleman agree with me that it is important quickly to solve the outstanding issue of the representation of the Palestinians at the talks—because represented at the talks they must be? Does the right hon. Gentleman agree with me that Mr. Shamir is right to draw attention to the enormous concessions and progress made by the Syrians and that it is now for Mr. Shamir to make a similar advance on behalf of Israel, because it is the state of Israel perhaps more than any other country or people in the region that stands to benefit from the ending of a dispute which has bedevilled and impoverished the region?

Mr. Hurd: The right hon. Gentleman puts it well. We are waiting for the considered response of the Government of Israel. The first response of the Prime Minister was encouraging, as the hon. and learned Member for Leicester, West (Mr. Janner) and the right hon. Member for Manchester, Gorton (Mr. Kaufman) have pointed out. We hope that Chat will develop into a positive response. Of course the Palestinians must be properly represented and a great deal of work has been devoted to overcoming that obstacle. The idea of having a joint Jordanian-Palestinian delegation seems to have gathered strength and support. We very much hope that that will happen. I also very much hope that it may be possible to suspend the building of settlements in the occupied territories at this time. There is no doubt that the building of settlements by Israel in the occupied territories constitutes a very considerable obstacle to peace.

New Zealand

Mr. Amos: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will meet the New Zealand Foreign Minister.

Mr. Hurd: We met in April and again in May in Washington. There are no present plans for a further meeting.

Mr. Amos: In view of the still close cultural, historical and political links between the two countries, will my right hon. Friend continue to ensure that New Zealand has open and fair access to the United Kingdom market and to other markets in the EEC? Will he also do his best to support New Zealand in the next round of the GATT talks so that our friends on the other side of the world know that we have not forgotten them?

Mr. Hurd: I am glad to say that my talks with my New Zealand colleague and the talks of my right hon. Friend the Prime Minister with his New Zealand colleague show that our dealings and relations are in excellent shape. Of course New Zealand, perhaps as much as any other country, stands to benefit from an open European Community and from success in the GATT talks. That is one of the matters that we discuss most often with New Zealand and in which it has a wholly legitimate interest.

Baltic States

Mr. Flynn: To ask the Secretary of State for Foreign and Commonwealth Affairs what new initiatives he has recently taken to strengthen links between this country and the Baltic states.

Mr. Douglas Hogg: Since new authorities were elected in the Baltic republics our contacts with them have developed steadily. Baltic leaders have paid several visits to London over the past year. British diplomats have been frequent visitors to the Baltic capitals. We keep in touch with the Estonia and Lithuania information offices in London. We are already backing projects in the Baltic republics through the know-how fund. We hope to add to these and to expand cultural and educational contacts through the British Council.

Mr. Flynn: As the attacks on the Baltic states by the Soviet Union have continued relentlessly with attacks on border stations and the present attempt to impose on the Baltic states the sale of all union factories at ruinously disadvantageous prices to those states, will the Minister assure us that the increased aid to the Soviet Union under the G7 agreement will be conditional on respect for the legitimate aspirations of the Baltic states, one of which is full independence?

Mr. Hogg: The hon. Gentleman makes a fair point. We have taken every opportunity, including the opportunity last week, to impress upon the Soviet Union the vital importance of getting down to meaningful negotiations with the Baltic republics. That is the only way forward and we will continue to stress that at every opportunity.

Mr. Wolfson: May I thank my hon. and learned Friend for his positive response on both points? May I encourage him to ensure that the Soviet Union is continually reminded of Britain's long-standing view about the illegitimate occupation of those lands and that we believe that their opportunity for economic growth will be much greater if they are allowed to pursue their own destinies?

Mr. Hogg: My hon. Friend is right to say that the British Government have never recognised the de jure integration of the three Baltic republics into the Soviet Union. He is also right to stress that it is absolutely vital that there are negotiations between the Baltic republics and the Soviet Government with a view to determining the future of those republics.

Middle East

Mr. Canavan: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had about solving the outstanding problems in the middle east; and if he will make a statement.

Mr. Douglas Hogg: My right hon. Friend keeps in close touch with all concerned. He discussed those issues with our G7 colleagues during the recent economic summit. The political declaration issued by the summit contained a substantive passage on the middle east. He raised the peace process with the Israeli Foreign Minister on 18 July.

Mr. Canavan: Does the Minister agree that Mr. Shamir's latest response to the Baker initiative is a welcome indication that the Israeli Government are at last


beginning to shift from their intransigent position? Will the Minister, along with the Secretary of State, try to use his influence to pursue the point that was made in the Foreign Affairs Select Committee report, which was published earlier today, that a comprehensive peace plan should be based on United Nations Security Council resolutions 242 and 338, which provide for the recognition and security of Isreal as well as the recognition of the right of the Palestinian people to self-determination?

Mr. Hogg: I suppose that this is the first time that I have agreed with every single point that the hon. Member for Falkirk, West (Mr. Canavan) has made. I agree that Mr. Shamir's response is important. I agree, too, that any discussions must be on the basis of resolutions 242 and 338. I agree further that it is essential that the participating Arab states recognise the need to maintain the security and the sovereignty of the state of Israel.

Industrial Relations

The Secretary of State for Employment (Mr. Michael Howard): With permission, I should like to make a statement about the Government's proposals for further reform of the law on industrial relations which are published in a Green Paper today.
Those proposals are designed to consolidate and build on the improvement in this country's industrial relations over the past 12 years. Their purpose is to ensure that we have an effective and up-to-date framework of law in order to maintain that progress throughout the 1990s. Each of the proposals contained in the Green Paper is carefully designed to meet a clear deficiency in our present arrangements. They are designed to increase the rights of individual members of the public, of individual trade union members and of the community at large.
The first group of proposals in the Green Paper concerns strikes and other forms of industrial action. It is worth recalling that, before 1980, the law gave trade unions a virtually unlimited licence to organise strikes and industrial action, no matter how remote they were from the original dispute. There was no requirement for strike ballots, and the law allowed the disruptive effects of industrial action to be spread far and wide by flying pickets.
As a direct result of this Government's legislation, the law now protects jobs and businesses against secondary action and secondary picketing and, for the first time in our history, strike ballots have become a generally accepted feature of British industrial relations. Few now seriously question the role our legislation has played in reducing the number of strikes to its current level—the lowest for more than 60 years. We now propose to strengthen the law in the following ways.
First, as my right hon. Friend the Prime Minister announced in his statement on Monday, we propose to provide a new right for members of the public in relation to unlawful industrial action which affects a public service. At present, the employer has the right to bring proceedings against a trade union which organises an unlawful strike. Members of the public, who are usually the specific target of industrial action, have no such right. If the employer does nothing, the citizen is defenceless.
We need to look no further than the recent strike of refuse collectors and other council employees in Liverpool for evidence of the need for citizens to be able to take action for themselves to protect the services on which they depend.
We therefore propose to establish a new right for members of the public to seek an injunction to halt unlawful industrial action affecting a public service if the employer concerned fails to use the remedies available to him. This proposal has been widely welcomed. It will enhance the protection of the public and it will be a further deterrent to unlawful industrial action.
Secondly, we propose to make it a legal requirement that unions should give at least seven days' notice of a strike. A period of strike notice is a well-established feature of the law in other countries. This requirement will help to protect the general public from the hardship caused by lightning strikes in public services. It will also allow employers to take steps to safeguard jobs and businesses.
I turn now to the rights of individual trade union members. The House will recall that in 1979 union members had no statutory right to elect their leaders; nor did they have any statutory right to vote in a secret ballot before a strike; and they had no protection against fines and expulsion from their union if they refused to strike. In short, the law allowed union leaders to exercise what the Attorney-General of the day described as "lawful intimidation" against their own members. Now as a result of our legislation, every union member has the right to elect his leaders by secret ballot and to vote in secret before he is called out on strike.
But experience has shown that the existing law does not always provide fully effective protection against fraud and malpractice in trade union ballots. For example, the Transport and General Workers Union elections for its national executive in 1990—and before that the general secretary election in 1984—both had to be re-run because of allegations of widespread vote-rigging in the first ballot.
Accordingly, the Green Paper proposes a number of changes in the law to strengthen the democratic rights of union members by giving them the opportunity to inspect their union's membership register to detect bogus and duplicate names and by requiring records to be kept of the number of ballot papers issued and returned in each locality. In addition, we propose to extend the requirements for fully postal voting and independent scrutiny, which have applied to union elections since 1988, so that they also cover strike ballots and ballots on union mergers.
I propose a number of further changes in the law to strengthen the rights of union members. The first concerns an employee's freedom to join the union of his choice. As a result of the Employment Act 1990 no one can lawfully be refused employment because he is, or is not, a member of a trade union. But it is still the case that operation of the Trades Union Congress's so-called Bridlington principles can deny individual workers the opportunity to belong to the union which they believe will most effectively represent their interests.
Indeed, the Bridlington principles can effectively deny an employee any choice at all in the union that he joins. In some cases, they prevent him from belonging to any union except the union that he wants to leave. If a union member disagrees with the policies of his union, he may find that his only choice is between remaining in that union and ceasing to be a member of any union affiliated to the TUC.
It is no surprise, therefore, that the Bridlington principles have come under increasing strain and that they are now regarded as unworkable even by the leaders of major TUC unions. For example, the general secretary-elect of the Transport and General Workers Union, Mr. Bill Morris, said recently that the Bridlington principles are "ripe for review" and that
today when we are about choice and opportunity for the individual there is no choice or opportunity within them.
The recent turmoil in the Union of Construction, Allied Trades and Technicians is clear evidence of the truth of those remarks. We therefore propose that, where more than one union represents employees in a particular occupation or industry, individual employees should be free to choose which union they join without the constraint of any arrangement between trade union bosses which is designed to deny them that freedom of choice.
The second proposal for strengthening the rights of union members concerns the practice of making automatic


deductions from employees' pay on behalf of their union. It is a clear anomaly in the law that deductions, which may include special strike levies as well as union subscriptions, can be made from the pay of a union member without his consent.
If those so-called check-off arrangements have been agreed between his employer and his trade union, there is nothing that an individual employee can do to escape from them, short of resigning from his union. There is evidence that, in some cases, these arrangements operate without even the knowledge of the employees concerned. In the construction industry, for example, some employees found that through the check-off they were paying subscriptions to a union that they had never joined.
Accordingly, we propose to make it unlawful for any deduction to be made from an employee's pay on behalf of a trade union without his individual, written consent. We do not propose to make the practice of the so-called check-off unlawful, as it is in France, but we do propose that in future it should have to operate with the consent of each employee.
The third proposal concerns the ability of members to ensure that the finances of their unions are managed, and are seen to be managed, properly. The Lightman report on the conduct of the National Union of Mineworkers' finances during and after the miners' strike of 1984–85 revealed serious irregularities. The findings of that report indicated a clear need to strengthen the law to protect the rights of union members. The Green Paper contains a number of proposals to increase the accountability of union leaders to their members for the conduct of their unions' financial affairs, and to strengthen the powers of the independent certification officer.
The final proposal in the Green Paper concerns the legal status of collective agreements. The law in this country is virtually unique in creating a presumption that collective agreements are not legally binding on both parties. In most other industrialised countries, it is normal practice for collective agreements to have the status of contracts that impose obligations equally on both parties. In those countries, employers and trade unions alike find that that brings greater clarity and precision to collective bargaining, and greater stability to industrial relations.
Furthermore, the effect of the United Kingdom's tradition of non-binding collective agreements is, in practice, to create an imbalance of obligations. On the one hand, trade unions are free to ignore agreements that they have signed, and to organise and threaten strikes even while those agreements are in force. Employers, on the other hand, are legally obliged to observe the terms of a collective agreement when they are imported into the individual contracts of their employees. The result is that the terms of collective agreements are legally enforceable by employees against their employers, but not by employers against trade unions.
Now that there is a much wider acceptance of the role of the law in industrial relations, the Government believe that the time has come to consider a change which would give positive encouragement to the development of legally enforceable agreements that would be binding on both parties. The proposal in the Green Paper is to reverse the

present statutory presumption so that a collective agreement would be legally binding unless it contained a specific provision to the contrary.
Employers and trade unions would, of course, remain free to decide whether or not to make collective agreements legally binding. But changing the law in this way would mean that negotiators would have to consider in each case whether there were advantages in giving all or part of a collective agreement the status of an enforceable contract, and it would make it easier for them to conclude legally binding agreements if they wished to do so.
We have now reached a decisive stage in the history of industrial relations in this country. As a result of the legislation that the Government have introduced since the 1980s, our industrial relations have achieved a stability and a maturity that seemed unattainable in the 1970s. It is now generally accepted that the law has a legitimate and necessary role to play in protecting the individual and the community as a whole against the abuse of industrial power.
These proposals will benefit individual members of the public by giving them protection against lightning strikes, and a new legal right to stop unlawful strikes in the public services. These proposals will benefit union members by giving them the right to join the union of their choice, the right to protect the funds of their union from mismanagement and the right to decide for themselves whether union dues and strike levies should be automatically deducted from their pay. These proposals will benefit the country as a whole by making it even more attractive to overseas investors by providing further safeguards against irresponsible industrial action and encouraging legally enforceable agreements which are common practice in almost every other major industrialised country.
The choice before the House and the country is now clear. On the one hand, we could undo much of the legislation of the past 12 years, and in some respects go further than ever before in increasing the power of trade unions and making strikes easier, longer, more frequent and more damaging. That is the policy of the Labour party and its trade union supporters. On the other hand, we can carry forward the process of reform and build on the achievements of the past 12 years. That is what the proposals in the Green Paper are designed to achieve, and that is why I believe that they deserve the support of the House.

Mr. Tony Blair: The Secretary of State is right to say that legally enforceable collective agreements have not been the tradition in our country, but it is commonplace elsewhere in Europe. I assume that he is proposing that they are introduced in the same way as in the rest of Europe. Will he confirm that, in recent years at least, it has usually been employers, not trade unions, who have been in breach of collective agreements? Will he further confirm that, if these proposals are applied in the same way as they are in the rest of Europe, Rolls-Royce could not have issued the notices of termination to staff, ITN could not have dismissed its staff as it did recently, and the printing companies could not be de-recognising trade unions as they are doing? I assume, therefore, that the Secretary of State will do this in such a way that it will cover agreements between trade associations and unions as well as individual unions and employers.
As for customers who sue in respect of unlawful strike action, will the Secretary of State confirm that unions have no immunity now under the law if they call unlawful strike action? As for suing in respect of unofficial action, will he confirm that the problem has been not a gap in the law, but the fact that, because the action is not endorsed by a union, the plaintiff ends up suing an individual employee? That is why the law has not been applied more often in the past.
As for the bits and pieces on scrutineers of union ballots, balloting requirements and the finances of unions, there is a slight contrast, is there not, between the frenzy of activity in respect of union finances and the Secretary of State's total indolence last year when he received letters on behalf of the staff of BCCI? [HON. MEMBERS: "Hear, hear."] But again—[Interruption.]

Mr. Speaker: Order. Let us have a stop to this pointless behaviour.

Mr. Blair: If the Secretary of State can show that there are genuine problems to which he has a genuine solution, of course we shall examine them carefully. Naturally everyone has an interest in seeing fair play at union elections, but why are the proposed measures to apply to unions only and not to companies? Why are the unions to be refused the right of direct debit in respect of union dues, but every other society, every other unincoporated body and every corporate body will be able to use direct debit without restriction? Why is there one law for unions and another for companies? Why are these highly complex rules to be applied to union members registering votes with their union, but not to shareholders registering their votes with companies? Why are there all these measures to insist that unions consult and inform their members but absolutely nothing to require employers to consult and inform employees? Is the citizen not an employee as well as a consumer?
I have gone through the Green Paper. I may be wrong, but I think that there are about 50 to 100 separate measures concerning union members and their union. Will the Secretary of State confirm that there is not one right anywhere in the document given to employees to require fair treatment from their employer? Indeed, on the seven-days cooling-off period, he says, again rightly, that there are similar provisions in the rest of Europe. So there are—in France, for example; and in Italy last year such provisions were introduced. When the provisions were introduced there the duty not to take action unilaterally was imposed not just on unions but on employers. Will that be the case here? Will the provision come with the same package of rights with which it comes elsewhere in Europe?
Is not the case about even-handedness nowhere more surely shown than in respect of the centrepiece of the Green Paper, which is an attempt to outlaw the arrangement between unions not to poach each other's members—the Bridlington rules? The Secretary of State says that he proposes not abolition but review. How does the proposal amount to a review of the Bridlington rules rather than their abolition? If he has any vestigial sense of responsibility, and if the proposal is not—it almost certainly is—a partisan piece of mischief-making, will he at least examine and discuss with employers the impact of such a move not just on inter-union disputes but on single union agreements, through which the proposal will drive a coach and horses?
In addition to heeding the warnings about the potential damage that could be inflicted by free-for-all industrial relations, is not the most telling point about the proposals not only their utter irrelevance to the key issues of the 1990s—training, skills and unemployment—but the fact that the Government will grant employees the theoretical right to join any union, and even the theoretical right to join a different union on different days of the week, but refuse absolutely to grant the right that exists in every other European country to allow that union to represent its members at the workplace? Employees have the right to join a union but are denied the right to have it represent them, which is the reason for joining it. Can there be anything more one-sided, partisan and irrelevant?
When the Secretary of State took office 18 months ago, he said on the "Today" programme that there would be no more union legislation because he wanted to concentrate on training. Is not the real reason for the Green Paper that he has so miserably failed on training that he must return to the old Tory refrain about unions? Is not that the hallmark of the Government? Those irrelevant, one-sided proposals are before us today because the Government have created the fastest rising unemployment in Europe and have not a clue what to do about it, and because the training of the British work force, so vital to our future, is being neglected and undermined by funding cuts pushed through by the selfsame Ministers. Because the Government have no answers to the problems of the 1990s, they return to the battles of the 1970s. That is the hallmark of this Government.
The Secretary of State could have used today to try to build a new partnership for success at the work place between Government and industry and between employers and employees—that would have been more possible today than ever before—but he has chosen not to do so. Instead, he has set out the agenda on which his party will fight the election. Whatever may have been the case in the past, it is no longer the agenda for the future of this country. For that reason, among others, we shall have a change of Government after the election.

Mr. Howard: Everything that the hon. Member for Sedgefield (Mr. Blair) has said this afternoon bears the imprint of the trade unions which own his party lock, stock and block vote. They elect the Labour party's leader, choose its Members of Parliament, dominate its national executive and control its party conferences. The hon. Gentleman said that we should be talking about training. He should talk about training to the Transport and General Workers Union which sponsors him and the leader of his party. Just two weeks ago, that union voted to boycott youth training, employment training and the training and enterprise councils.
All hon. Members will have noticed that, on each of the proposals in the Green Paper, the hon. Gentleman maintained a cowardly silence which reflected his failure to face up to his trade union paymasters.
The hon. Gentleman specifically asked whether the proposals would cover agreements between trade associations and trade unions. I am happy to consider that suggestion in the context of the consultation document that we issued today. He rightly said that at present trade unions have no immunity from the consequences of unlawful action. The difficulty is that only employers and trade union members can take action in respect of such unlawful action. If they do not choose to do so as a


consequence of damage suffered by the public, the individual citizen is defenceless. We are taking action to ensure that the citizen can do what is necessary to defend himself against unlawful industrial action that is specifically targeted at him.
The hon. Gentleman sought to draw an analogy between check-off and direct debit; but check-off is not direct debit. It is the removal of money from the pay packets of trade union members. All we say is that they should give their consent before that happens. Is the hon. Gentleman against or in favour of that proposal? Perhaps he will let us know.
The hon. Gentleman suggested that nothing in the document required the law to deal fairly with employees, but the law already requires fair treatment of employees. That has been the purpose of all the laws that we have passed in the past 12 years. That did not happen under the laws that were in force when Labour was in power, but it certainly happens under the laws that have been in force since we took office.
The hon. Gentleman raised the question of the effect that the abolition of the Bridlington principles might have on single union agreements. The proposals would have no effect whatever on such agreements. It is currently possible for employees to join another trade union and not to affect the operation of single union agreements. None of the proposals would have the slightest effect on single union agreements.
When the House judges the hon. Gentleman's response to the proposals, it will want to bear in mind the fact that, when we debated the legislation that provided the first ballots for trade union members, the right hon. and learned Member for Monklands, East (Mr. Smith) described our proposals as irrelevant effrontery. The hon. Member for Sedgefield described them as a shabby, partisan strategem. We made the hon. Gentleman eat the words that he uttered then, and we shall make him eat the words that he has uttered today.

Mr. Bob Dunn: Does my right hon. and learned Friend agree that Opposition Members should be ashamed of their attitude? How can they claim to speak up for British working men and women when 155 Labour Members, including the hon. Member for Sedgefield (Mr. Blair), are sponsored and paid for by trade unions? Does my right hon. and learned Friend agree that Opposition Members will answer only to their paymasters and not to the people that we represent?

Mr. Howard: My hon. Friend is entirely right. The extent to which the Labour party is beholden to its trade union paymasters is reflected in its every utterance on this subject.

Mr. Ron Leighton: What has happened to all the recent protestations and claims about how good industrial relations are in this country? Is it not clear that the statement is absolutely unnecessary? It is crude and blatant electioneering, and the Secretary of State is abusing industrial relations for crude electoral reasons. The British people are far too sophisticated to fall for that. By linking himself to this operation, the Secretary of State is bringing the Department into disrepute.

Mr. Howard: The hon. Gentleman, who is sponsored by the Society of Graphical and Allied Trades, at least gives the Government credit for the improvement in industrial relations which has been achieved during the past 12 years. I am happy to acknowledge that it is our legislation that has led to that improvement in industrial relations. If we are to maintain that record in the 1990s, we need to keep the law under review and deal with specific and identified shortcomings in our present arrangements. That is what the Green Paper seeks to do.

Sir Norman Fowler: Contrary to what the Opposition—[Interruption.] If I may declare an interest, it is as a member of the National Union of Journalists.
Contrary to what the hon. Member for Sedgefield (Mr. Blair) said, is my right hon. and learned Friend aware that his proposals will be widely welcomed by the public, in particular the requirement to give seven days' notice of industrial action? Is he also aware that some of the most damaging industrial action in Britain takes place in essential services, such as transport and the health service? May I have my right hon. and learned Friend's assurance that the search for a better way of dealing with strikes and industrial action in essential services will not stop at this point?

Mr. Howard: I am grateful to my right hon. Friend for his support. He played a distinguished part in putting on the statute book the reforms of the past 12 years. I take note of his point, although I believe that a combination of the measures which he himself started in what became the Employment Act 1990 and the new rights which we give individual members of the public in these proposals will go a long way towards achieving the improvements that he has recognised are needed for essential services.

Mr. Stanley Orme: I have spent a large part of my life trying to improve industrial relations and working for better industrial relations, and I find the Secretary of State's proposals this afternoon disastrous. How does he think that his petty proposals on collective bargaining and, not least, on check-off, which has worked successfully in many industries both for employers and for trade unions, will improve industrial relations? My hon. Friend the Member for Sedgefield (Mr. Blair) struck the right note this afternoon in the proposals that he made. The Secretary of State will damage industrial relations, not improve them.

Mr. Howard: At least the right hon. Gentleman, who is sponsored by the Amalgamated Engineering Union, has not followed the silent example of the hon. Member for Sedgefield (Mr. Blair) on the nature of the proposals. The right hon. Gentleman spoke about the check-off and its success during the past few years. If the check-off genuinely has the consent of trade union members whose money is taken from their pay packets, nothing will change. The only proposal that we make is that those members should have to give their consent. If the right hon. Gentleman suspects that that will lead to a change, it can only be because those trade union members do not consent to what is happening at the moment.

Mr. David Madel: Can my right hon. and learned Friend confirm that in relation to action that an individual citizen or citizens can take, provided that the trade union has repudiated the unofficial


action, action cannot be taken against the trade union, and the citizen would have to find the leaders of the unofficial strike? Will he confirm that seven days may not be long enough for strike action notice and that we may need more time for negotiations to take place? Will he further confirm that the Government would like to see more three-year wage deals and could well set an example themselves by going for that where they are an employer?

Mr. Howard: My hon. Friend made three points [Interruption.]

Mr. Speaker: Order. The hon. Member for Workington (Mr. Campbell-Savours) must sit down. He has not been called to put a question. [Interruption.] Order. This is disgraceful behaviour. The hon. Member knows perfectly well that we do not behave like that here.

Mr. Howard: I thought that Opposition Members were proud of their association with the trade union movement. My hon. Friend made three points—[Interruption.]

Mr. Speaker: Order. I remind the House that we have a busy day ahead of us. I shall have to put a limit on speeches, so I ask hon. Members to settle down, please. I shall allow questions to continue until 4.20 pm. We are then to have a ten-minute Bill, which I understand will be opposed. We shall move on to the Opposition day debate very late. I ask hon. Members to settle down.

Mr. Howard: My hon. Friend made three points. First, he asked about the rights that we would give members of the public. I am happy to confirm that those rights would apply to all unlawful action in public services, both official and unofficial. He rightly assessed how they would work in relation to unofficial action.
Secondly, the seven-day notice period is intended primarily not as a cooling-off period but as a period of notice to members of the public. I shall carefully consider any representations that are made in the consultation exercise on lengthening the period.
I have much sympathy with my hon. Friend's third point about three-year wage agreements.

Mr. James Lamond: Before the Secretary of State's Parliamentary Private Secretary wastes his time during his cowardly political smear attacks, I tell the Secretary of State that hon. Members who are sponsored by trade unions receive no money directly from them—unlike Conservative Members, who get money in their pockets.
Does not it speak volumes for the Secretary of State for Employment that, at a time when unemployment is mounting month by month and will reach more than 3 million, he feels it imperative to fiddle with the trade union movement, hoping to gain some political advantage? I welcome what the right hon. and learned Gentleman has done today because it is another nail in the Government's coffin. Three million individuals and their families have been deprived of their rights by his ineptitude.

Mr. Howard: The hon. Gentleman, who is sponsored by the Manufacturing, Science and Finance union, referred to unemployment. Does he think that his party's policies, which would make strikes easier, more frequent, longer and more damaging, would help to reduce unemployment?

Mr. James Cran: Does my right hon. and learned Friend accept that, whatever the more timid and timorous industrial representative bodies may think about the proposals, they will undoubtedly be widely welcomed by managers and individuals in the work force because they know that many elements in the trade union movement hanker for a return to the old days of lecturing Governments, pushing companies around and trampling on the rights of individuals?
I have personal experience of that, because when I was the CBI's northern director the northern TUC spent a not inconsiderable amount of time trying to get me sacked from that post because it did not like what I was saying publicly. Does my right hon. and learned Friend agree that such conduct is not acceptable? Will he tell the Opposition that the trade union movement has a role, but that it is no greater than it is at present, and is probably less?

Mr. Howard: My hon. Friend speaks from considerable experience in these matters. He has recounted one example of unacceptable conduct by the trade union movement. Our approach must continue to be to consider our arrangements, to identify any shortcomings, and to deal with them fairly but firmly. That is what the Green Paper proposes.

Mr. Malcolm Bruce: Does the Secretary of State accept that Liberal Democrat Members are not in the pay of trade unions or employers' organisations? Is he aware that we have supported many of the Government's trade union reforms over the past few years and have called—ahead of the Conservative party—for several of them, including ballots? Does he accept that there is a widespread feeling that there is no justification for taking firmer measures, that they are not relevant to improving industrial and employer-employee relations and that in many ways they are not germane to the fundamental business of running the economy?
Will the right hon. and learned Gentleman tell the House what rights he would offer, for example, to the 120 journalists at the Aberdeen Press and Journal who were sacked because they tried to belong to a trade union, which employers denied could negotiate on their behalf? Are not those journalists entitled to have unions negotiate on their behalf? Can the right hon. and learned Gentleman explain his comment to the hon. Member for Sedgefield (Mr. Blair) that there would be no end to single-union agreements?
Conservative Members have, rightly, been loud in their protests about the Transport and General Workers Union for undermining the Ford agreement in Dundee, but the right hon. and learned Gentleman's proposals will allow people to join another union and undermine the regulations. Simply standing at the Dispatch Box and saying that that is not true is not good enough; the right hon. and learned Gentleman must explain why. Employees need rights—they need the right to be consulted and the right to be involved. The Government have denied them those rights, which have been granted in every other European Community country.

Mr. Howard: The hon. Gentleman is mistaken in his assertions. I explained clearly in answering the hon. Member for Sedgefield (Mr. Blair) why these proposals would not cut across single-union agreements in any way.
As for the journalists who were dismissed, the hon. Gentleman should recognise that the Government


introduced legislation making it clear that people should not be discriminated against because they are members of trade unions. A Conservative Government first introduced the right for those unfairly dismissed to take their complaint to an industrial tribunal and to obtain compensation. The hon. Gentleman should give credit to the Government for those and other achievements.

Mr. Nicholas Soames: Is my right hon. and learned Friend aware that there is within the public sector one particularly difficult union—the Prison Officers Association? Is he aware that there are many fine people in that union but that it seems to be run by some difficult, bloody-minded men? Will my right hon. and learned Friend take a close look at the affairs of the POA and see what he can do to reduce the industrial disputes in the prison service? There are 40 separate such disputes at present.

Mr. Howard: I understand my hon. Friend's frustration, but it is not the job of Government to interfere in the affairs of individual trade unions; it is the job of Government to establish the right framework. That is what we have consistently tried to do over the past 12 years. These proposals represent a further advance along that road.

Mr. Ian McCartney: I am a member of the Transport and General Workers Union—unlike the Secretary of State, a barrister, who is a member of one of the most exclusive trade clubs in the country and of Lloyd's, the most crooked bunch of trade unionists in the country.
Will the right hon. and learned Gentleman explain why he failed in his statement to refer to the right of the 30,000 young trainees on waiting lists to sue the Department of Employment for their right to join a training scheme of their choice at a time of their choice? Why did not the right hon. and learned Gentleman refer to the right of someone unfairly dismissed from work, having worked there for 12 or more months, to go to a tribunal? Why did not the right hon. and learned Gentleman refer to the right to stop work if working conditions are proved to be unsafe? Those are the real rights of citizens at work, and they have been ignored by the Secretary of State. When will the Government stop attacking the trade unions and attack unemployment?

Mr. Howard: The hon. Gentleman is not only a member of the TGWU but is sponsored by that union. I find it extraordinary that he makes allegations about youth training when, just two weeks ago, the union that sponsors him voted to boycott it. The hon. Gentleman should be thoroughly ashamed of himself.

Mr. John Bowis: May I, as an unsponsored and unchecked-off member of the Managerial Staffs Federation, ask my right hon. and learned Friend whether he agrees that the proof of the step-by-step approach to industrial relations reform is shown by the step-by-step approach to the record low level of strikes in this country? Does he agree that it is a major step forward to restore the individual's rights by abolishing the Bridlington agreement; and will he go a step further and ensure that the figures for membership of trade unions, which can often influence sitting rights on committees that negotiate, do

not reflect the tombstone membership which all too often occurs? Will he stop this unacceptable practice of claiming to have more members than there really are?

Mr. Howard: That is an important point. The proposals that we make for insisting on the consent of trade union members before their dues can be checked off their pay packets may well go some way towards meeting that point. If my hon. Friend thinks that further action is required, he will bear in mind that this is a Green Paper, a consultation document, and I shall of course look carefully at all the representations that we receive.

Mr. Norman Hogg: The Secretary of State had much to say about ballots taking place before strikes, and that has become the practice in this country. Is he aware that in my constituency a company called Craven Tasker (Scotland) Ltd. is engaged in an industrial dispute in which the working people followed the letter of the law before they commenced industrial action? They were immediately dismissed by the employer. Will he condemn that employer and give trade unionists who engage in wholly lawful industrial action protection against dismissal?

Mr. Howard: I am not familiar with the circumstances of the dispute, and I do not think that the hon. Gentleman would expect me to comment on circumstances with which I am not familiar. If he writes to me about the matter, I shall be happy to respond.

Sir Michael Neubert: Will my right hon. and learned Friend be assured that those of my constituents who were greatly inconvenienced by strikes on London Underground and British Rail, called at 24 hours' notice a couple of years ago, will warmly welcome the provision that such strikes will require at least seven days' notice in future? Will he confirm that such a feature exists in the laws of most other European countries and that it is high time the British people had the same rights of protection against militant trade unions?

Mr. Howard: My hon. Friend truly speaks for the people of London, who have been severely inconvenienced in the past by lightning strikes of which no notice was given. His point is entirely right: similar protections exist in almost all other European countries, and they are more than overdue here.

Mr. Jim Sillars: If past Tory propaganda about the culpability of trade unions for our poor economic performance was correct, now that we have the weakest trade union movement since 1926 and the lowest strike record for 60 years, why do we have recession and mass unemployment? Who is to blame for that?
May I refer the right hon. and learned Gentleman to his remarks about unfair dismissal provisions? Why does his statement, couched in the language of the citizens charter, make no reference to bad employer practice or to the fact that an employer can abuse an employee and break the contract of employment, and then dismiss that employee just before his two years' employment are up, thereby denying the employee recourse to the unfair dismissal procedure?

Mr. Howard: But if, as the hon. Gentleman said, the action was a breach of the contract of employment, the


employee would have rights in respect of that breach whether or not the two-year qualifying period had expired. The hon. Gentleman should be well aware of that.
As for economic performance, does the hon. Gentleman seriously suggest that it would be improved by making strikes easier, longer, more frequent and more damaging—which would be the effect of the proposals of the Labour party and no doubt of his party, too?

Mr. Patrick Nicholls: Does my right hon. and learned Friend agree that, as his proposals today have been as vigorously opposed as all other previous reforms have been, we can reasonably expect that the Labour party will say next year that it was in favour of them all along? Will he agree that there could be no more effective condemnation of the complete insincerity of the Labour party on this issue than to recall that, when a proposal is brought before the House to give ordinary members of the public the right to resist unlawful action, the Labour party condemns it out of hand?

Mr. Howard: I agree entirely with my hon. Friend's second point. The Labour party's attitude to this right of individual members of the public gives the lie to the extent to which it has any real regard for ordinary members of the public.
I am not sure that I agree with my hon. Friend's first point. It would be much more characteristic of the Labour party to give the impression next year that it was in favour of the reforms, but to write small print into its policy making it clear that it would go back on them if it was ever to gain office

Mr. Harry Ewing: In order to save the hon. Member for Bolton, North-East (Mr. Thurnham) the trouble of telling the Secretary of State that I am sponsored by the Union of Communication Workers, I shall tell him. However, as the Secretary of State knows, I like to preserve a balance. Therefore, I shall tell the Secretary of State that the hon. Member for Bolton, North-East is a director of Wathes Holdings Ltd. and all its subsidiaries; he is a consultant to the Electrical Contractors Association; he is a consultant to the Institute of Civil Engineers; he owns agricultural land and property

in Cumbria; and has shareholdings in Wathes Holdings Ltd. and its subsidiaries. The difference between us is that I do not receive any money from my sponsorship, whereas he lines his pockets with the money that he receives.
I remind the Secretary of State, as I reminded him last week, that he has the worst record on unemployment of any post-war Secretary of State for Employmnet. As a test of his sincerity, will he place in the Library a copy of all cases where he says that employers are deducting contributions from union members without their consent? Will he tell us whether an individual who seeks an injunction will be eligible for legal aid?

Mr. Howard: If check-off is being made only with the consent of employees, the proposals in the Green Paper will not make any difference. However, everybody knows that that is not the case, and I suspect that the proposals may make a difference. I hope that the hon. Gentleman will at least follow the lead of the general secretary of his trade union who, speaking on the radio on Monday, warmly welcomed at least two of the proposals in the Green Paper.

Several Hon. Members: rose—

Mr. Speaker: Order. The House has heard that this is a consultation document. No doubt we shall come back to it when the House resumes in the autumn.

BILL PRESENTED

REGISTERED HOMES (AMENDMENT) (No. 2)

Mr. David Hinchliffe, supported by Mr. Tom Clarke, Rev. Martin Smyth, Mr. Ian McCartney, Mr. Eric Martlew, Mr. Gerry Steinberg, Mr. Keith Bradley, Mrs. Alice Mahon, Mr. Geoffrey Lofthouse, Mr. Max Madden, Mr. Mike Watson and Mr. Michael Welsh, presented a Bill to make further provision with regard to accommodation and conditions provided in residential care homes and in nursing homes, and to residential security in such homes; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 18 October and to be printed. [Bill 219.]

Points of Order

Mr. Bob Cryer: On a point of order, Mr. Speaker. As you will realise, the Secretary of State's announcement is a precursor to legislation—a highly controversial piece of legislation. Can you confirm that Conservative Members who are employed, as most of them are, by employers' organisations or certain employers and have a direct pecuniary interest which is used to line their pockets, unlike any Labour Member in respect of the trade union movement, will not be allowed to vote on this heinous, damaging and penal legislation?

Mr. Speaker: This is a hypothetical matter, as we have not yet seen the legislation. The House knows that every hon. Member is entitled to vote on matters of public policy.

Mr. David Ashby: On a point of order, Mr. Speaker. You will recall that on 18 June I raised a point of order about the failure of the hon. Member for Coventry, North-East (Mr. Hughes) to present a ten-minute Bill. Such a failure also occurred on 14 May. You will also know, Mr. Speaker, how disappointing it is for Back-Bench Members to wait to hear about the Labour party policy on immigration and to find that ten-minute Bills are not presented.

Mr. Speaker: We have such a Bill today.

Mr. Ashby: That is my point. The failure to present ten-minute Bills deprives other hon. Members of the opportunity to present them. The same Bill is to be presented for the third time today by the hon. Member for Coventry, North-East (Mr. Hughes). I ask your protection, Mr. Speaker, and ask you to instruct the hon. Member to apologise most abjectly to the House for his disgraceful behaviour.

Mr. Speaker: That is pretty bogus stuff, but it is July.

Mr. Max Madden: On a point of order, Mr. Speaker. You will probably know that the Chairman of the Select Committee on Health issued a letter saying that there is incontrovertible evidence that the draft report of his Committee was leaked to the Department of Health before it had been finally considered, and had been seen by Ministers and officials in that Department. Moreover, you will also be aware of allegations that a member of the Committee came to that Committee with more than 30 amendments which were clearly ghost-written by the Department of Health and which had the effect of rigging the Committee's report. Furthermore, the Member involved said that he had had discussions with the Government Chief Whip about the amendments and that he was under a four-line Whip to ensure that they were accepted. They were accepted at a sitting lasting more than eight hours.
It is clear that the effect of those shenanigans has been to undermine the principle of independent Select Committees. I therefore ask you, Mr. Speaker, to give the House your advice about what can be done, because clearly, this is a matter of collusion and conspiracy involving a member of a Select Committee, Ministers and officials of a Department and the Government Chief

Whip. Therefore, I seek your advice about what action can be taken to protect the independence of select Committees.

Several Hon. Members: rose—

Mr. Speaker: Order. I have been asked a question and I shall rule upon it.
I have been informed that the Secretary of State for Health confirms that a copy of a draft report was received by his Department. The House decided in 1985 that such matters should be investigated in the first instance by the Select Committee involved. If that Committee considers that there has been substantial interference with its work, the matter will automatically stand referred to the Select Committee on Privileges. I have no role in the matter, and it should be pursued on the Floor of the House.

Mr. Robin Cook: On a point of order, Mr. Speaker. The House——

Several Hon. Members: rose——

Mr. Speaker: Order. Hon. Members should contain themselves.

Mr. Cook: As a result of your statement, Mr. Speaker, the House is in the extraordinary position of hearing that the Secretary of State has today admitted that his Department received the contents of a draft report and, after that draft report had been seen, every paragraph relating to national health service trusts was dropped. Many of them were critical of the Secretary of State and stated, in particular, that his decision to grant trust status to Bradford hospitals had made their financial position worse. There has, according to your statement, been a leak—

Mr. Speaker: Order. The hon. Gentleman must not go into the detail. I got up when I did because—[Interruption.] It is a serious breach. I have given my ruling, and it is now a matter for the Select Committee involved. If it so decides, the matter will automatically be referred to the Select Committee on Privileges, and I cannot hear questions of privilege on the Floor of the House.

Mr. Cook: The difficulty that the House is in is that, because it will rise—[Interruption.] It is a grave matter that affects every hon. Member——

Mr. Speaker: Order. I cannot allow even Front-Bench spokesmen to go beyond my ruling, and I have made a ruling on this matter.

Several hon. Members: rose——

Mr. Speaker: Order. To the other hon. Members who intend to raise the matter, I say that they must not do so either.

Mr. Robert G. Hughes: On a point of order, Mr. Speaker. You have, correctly, ruled on the subject of the leak that led to a copy of the document going to the Secretary of State, but that is not the matter that I wish to raise. I wish to raise the matter of a further leak concerning the same document. The only leak that I have heard was the Chairman of the Select Committee wrongly talking about the document on the radio. That was the leak.

Mr. Speaker: I have already made my ruling on the matter, and I am not prepared to take any further detail. If what the hon. Gentleman alleges is true, it is a matter for the Select Committee and then for the Select Committee on Privileges.

Mr. Phillip Oppenheim: On a point of order, Mr. Speaker. It is not about the leak. Surely it is in order for the majority of members of a Select Committee to disagree with a report that was written by the Chairman and his unelected advisers and by no one else. Surely the abuse is for the Chairman to expect the majority of the Committee to agree with him.

Mr. Speaker: This is not a matter for debate on the Floor of the House. I have already said that I have received information from the Secretary of State for Health, who confirms that a copy of the draft report was received in his Department.

Ms. Mildred Gordon: On a point of order, Mr. Speaker. Have you received any representations requesting the Home Secretary to make a statement to the House regarding the Bank of Credit and Commerce International documents lost in a fatal blaze in a warehouse in my constituency two weeks ago? Officials of the FBU—the Fire Brigades Union—have sent to the police today evidence that the BCCI files were in the warehouse, although the police forensic department investigating the cause of the fire has said nothing so far. Furthermore, there was a fire in another warehouse containing archives a few weeks ago. Rumours are rife in my constituency, and it is imperative that information is given to the House.

Mr. Speaker: I have received no request for a statement on that matter.

Mr. Frank Cook: On a point of order, Mr. Speaker. If circumstances had been different, I would have raised this issue under Standing Order No. 20, but it has emerged within the past hour that there is a possible conflict of interest concerning Professor John Knill, the chairman of RAWMAC—the Radioactive Waste Management Advisory Committee—and his involvement with Sir Alexander Gibb and Partners, a firm of management consultants under contract to Nirex—the United Kingdom Nuclear Industry Radioactive Waste Executive. RAWMAC has a responsibility to the Secretary of State for the Environment on major issues relating to the development and implementation of overall policy on radioactive waste management. It has to be independent. Nirex has the responsibility for making proposals. [Interruption.]
I am sorry, Mr. Speaker, if Conservative Members are not interested in the concerns of communities threatened by the deposition of radioactive waste. The point of order for you is that, as Professor Knill is involved with Nirex but is also the chairman of RAWMAC, his independence is in question. May I call for a statement from the Secretary of State tomorrow, as the choice of Sellafield has been announced this week and the House rises for a 12-week summer recess tomorrow?

Hon. Members: This is out of order.

Mr. Speaker: Order. I understand that the matter arose after 12 o'clock, and as the House will rise tomorrow I could not hear an application under Standing Order No.
20. I am sure that what the hon. Gentleman has said will have been heard by those on the Government Front Bench, and that they will consider the matter.

Mr. Robin Cook: Further to my point of order, Mr. Speaker.

Mr. Speaker: Order. I shall not take further points of order on the former matter. I have already ruled on it.

Mr. Tom Clarke: On a point of order, Mr. Speaker, I wish to raise a second important point arising from the deliberations of the Health Select Committee.

Mr. Speaker: Order. I do not know whether the hon. Gentleman serves on that Committee, but I have already given a firm ruling on the matter. It is for the Select Committee to consider, and then for the Select Committee on Privileges. It it not a matter for me, and we do not discuss privilege on the Floor of the House. So what is it?

Mr. Clarke: With the greatest respect, Mr. Speaker—and you know I have enormous respect for you—it is an entirely fresh point. [Interruption.] It is profoundly unfair that hon. Members who were not even on the Committee are seeking to restrict the ability of those of us who were to draw to your attention a very important point. Given that you, Mr. Speaker, have ruled—and rightly ruled—that what has taken place is a matter for the Select Committee on Privileges, there is another document to which I wish to draw your attention. It is the document in which the Secretary of State said, in response to the Chairman:
No public comment was made on it.
Given the role of the Secretary of State, and given that the Secretary of State will be taking decisions on applications for trust status by the end of August, should not the Secretary of State make a statement? That is a serious point.

Mr. Speaker: I have already made my ruling on this.

Dr. John Cunningham: I am not questioning what you have said, Mr. Speaker—[Laughter]—and I am not raising a point of order. [HON. MEMBERS:"Sit down then."] I simply want to ask—if the rabble on the Conservative Benches will allow me to speak—whether you, Sir, will at least hear what my hon. Friend the Member for Livingston (Mr. Cook) has to say before ruling it out of order. You did not allow my hon. Friend to finish his point, and I am simply asking you to do so.

Mr. Speaker: I will say this to the hon. Member for Livingston (Mr. Cook). Provided that he does not in any way—and I say this to him as a matter of honour—breach the ruling that I have given, which is quite clear, I will hear him. As a Front-Bench spokesman, he must not breach that ruling.

Mr. Robin Cook: I am most grateful to you, Mr. Speaker, for allowing me to speak. I was stopped last time not by you, Sir, but by Conservative Members. Let me make two points to you. [HON. MEMBERS: "He's raising it again."] I have been invited to speak by Mr. Speaker, and Mr. Speaker is in charge of our proceedings. If those on the Conservative Back Benches will allow another hon. Member to speak, Mr. Speaker, I will put two points to you. First, on the question of referral to the Committee of Privileges, I seek your guidance on whether there is any


way in which we can seek to put the matter before that Committee before the House rises for three months, during which time it will be impossible for anyone to take further procedural action on what is a grave situation. [Laughter.] If hon. Members do not understand that it is a grave situation, they do not deserve to be Members of the House of Commons.
Secondly, I put it to you, Mr. Speaker, that the House has today been placed in the odd position of hearing through you a statement from the Secretary of State to the effect that he received the draft document. In those circumstances, would it not be better for the House—and a courtesy for the House—for the House, and not just you —to be given a statement from the Secretary of State on why he received the draft report and what he did once he received it?

Mr. Speaker: The Select Committee will consider those matters and, as far as I am aware, it is perfectly in order for a Select Committee to meet during a recess. [Interruption.] I understand that I may be in error, if the hon. Member is referring to the Committee of Privileges.

Mr. Cranley Onslow: Further to the point of order, Mr. Speaker. You have given the House a clear and precise ruling, which should be helpful to us all. You have clearly explained that this matter is now back with the Select Committee and is for that Committee to resolve and that the House will have nothing more to do with it unless and until the time comes. May I appeal to you, Sir, to enforce your ruling and allow us to proceed?

Mr. Speaker: As ever, that was very helpful.

Mrs. Alice Mahon: On a point of order, Mr. Speaker. I do not seek to say anything about the leaked report being referred to the Committee of Privileges, but I want some advice——

Mr. Speaker: Order. I will hear the hon. Lady if her point of order is about another matter, but I remind her that this is an Opposition supply day. I will not hear the hon. Lady's point of order if it is about the Select Committee. Is it about the Select Committee?

Mrs. Mahon: I am a Back Bencher——

Mr. Speaker: And I am Mr. Speaker. Is the hon. Lady's point of order about the Select Committee?

Mrs. Mahon: It is about procedure. Can the Procedure Committee conduct an inquiry into why the hon. Member for Harlow (Mr. Hayes) moved 34 amendments at the last minute——

Mr. Speaker: Order. That is exactly what the Select Committee on Privileges—if the matter reaches that Select Committee—would want to consider.

Immigration (Dependent Children)

Mr. John Hughes: I beg to move,
That leave be given to bring in a Bill to permit, in certain circumstances, the immigration into the United Kingdom of dependent children of parents settled in the United Kingdom; and for connected purposes.
If the basic right to love and to marry and the important right to live with one's family are so highly valued by hon. Members, is it not ironic that the Berlin wall, which divided a country, a nation, families and loved ones should have enraged us, yet knowledge of the barriers that exist within the immigration legislation, which are just as divisive, should leave the House unmoved? Surely the celebrations at the destruction of the Berlin wall and the act of erasing that obscenity should have reminded the law-makers in this country that there can be no grounds for complacency or smug satisfaction while this country continues to operate inhumane immigration laws that divide families and discriminate largely unfairly against black people and predominantly against those from Bangladesh and India.
Anyone who was proud to posture at the bulldozed Berlin wall for the photographers should take a long look at the immigration laws and the practices that they endorse. If that person does not see a contradiction, he is guilty of the greatest hypocrisy in support of the implementation of the Immigration Act 1988 which I look forward to the next Labour Government repealing.
The race barriers at each British embassy, every British port and every British airport are the product of racist prejudice and bigotry embedded in immigration legislation. The effects of those barriers are just as cruel to parents settled in this country as were the distress and pain experienced by German families who were separated from their loved ones by the watch towers, concrete and barbed wire of the Berlin wall.
I want to concentrate today on one relatively small part of the immigration laws and will attempt to right an enormous wrong that has been perpetrated on many families and which could now he corrected, due to the introduction of new DNA technology which has exposed the Government's unfair discrimination against Bangladeshi, Pakistani and Indian children. The Home Secretary has been forced to concede that that technology is the most accurate method to determine parentage in immigration cases. Technology and my Bill would give the House the opportunity to erase from the Immigration Act 1988 a particularly cruel clause and allow the entry of children under the age of 18 to be dealt with in a just way.
Those children have the right to join their parents who have obtained British citizenship, but the parentage of those children has often been challenged and their applications refused. The argument has been used most often against children from the Indian subcontinent and particularly from Bangladesh and Pakistan. Entry clearance officers can take advantage of the fact that the registration of births of children in those countries is not compulsory. The absence of a birth certificate gives scope to say that a child's relationship is not as claimed, and permission to join parents is refused.
That discrimination really applies only to children from the subcontinent. In cases where children have been refused permission to join their families who have settled


here, DNA tests have shown beyond a shadow of doubt that their claims were true. A Home Office survey of those cases has shown that in more than 80 per cent. of cases the immigration officers had been wrong and the individuals were parents and children, exactly as they claimed.
However, the passage of time between the original applications and the DNA tests means that many of those children have now reached the age of 18 and are therefore no longer covered by the rule which allows them to join their parents. In other words, those families told the truth in the first place when their children were eligible to join their families. They were wrongly refused and now that their claims can be proven, the children are too old. That is a cruel and callous Catch-22. It is an inhuman anomaly in the Immigration Act.
Consequently, a substantial number of young people in countries such as Bangladesh and Pakistan can now prove a claimed relationship, but they were denied the right to join their parents in Britain because of the alarming number of erroneous decisions in the past. However, they are now over 18—the upper limit to qualify as a dependant of a United Kingdom settler.
Some 800 young people resident in Bangladesh have applied for entry on the basis of the stringent conditions imposed by the Home Secretary. Of that 800, decisions on 500 have been taken and less than one third have been allowed to come here. It is believed that the Home Office finds even that number to be too high.
An example of that miserable state of affairs is illustrated in the recent case taken to the European Court of Justice by Mr. R. De Mello under the instructions of the Birmingham-based solicitors Rust McKie. The case concerned Mr. Rahim, a British citizen of Bangladeshi origin and his son Angur Miah. The story began in 1976 when Mr. Rahim sponsored his wife and children, including 12-year-old Angur, to come to Britain to join him. The application applying to the whole family was refused because the immigration authorities did not believe that all the children, and in particular Angur, were Mr. Rahim's children.
In 1981 when Angur was 17, another application was made and was refused for the same reason. In 1984, another two applications were made, but they failed. The second application omitted Angur due to a clerical error. I should point out that the father is illiterate and the form was completed on his behalf.
After a lapse of 13 years in 1989—13 long years since the original application in 1976—a DNA test established that Mr. Rahim was in fact related to all his family. They were all allowed in with the exception of Angur Miah who, even after a further application in January of last year, was once again refused—this time because he had become too old. So, 14 years after the original application, Angur Miah the rightful son, cannot join his mother, father, brothers and sisters. He is exiled from his family because the Home Secretary refused to waive the conditions of the Act, or rule 53 as it has become known.

Sir Marcus Fox: The hon. Member for Coventry, North-East (Mr. Hughes) has been the invisible man since 14 May. This is the third attempt to bring in his ten-minute Bill. It must be the longest running ten-minute Bill in history. The wording of his present Bill differs strongly from that of his first, but the purpose is the same.

Anyone who listened to what he has said must understand that his Bill represents unrestricted immigration. If it were to be allowed, the loopholes would be enormous.
We thought that, when the hon. Gentleman disappeared the first and second times, he was being got at by his Whips because they did not want the debate to be brought out into the open. He has been nobbled because his Bill now states "under certain circumstances". That is not the original wording. Never mind the Berlin wall, everything else that the hon. Gentleman said is contrary to the purposes in which Conservative Members believe—straight and fair immigration control. If Opposition Members support the hon. Gentleman in the Division Lobby, I hope that everybody in the country will read carefully what the hon. Gentleman has said.
I served on the Standing Committee that considered the Immigration Act 1971. We introduced immigration rules to try to restrict the immigration that was concerning the whole nation. What did we do? We made provision for Commonwealth citizens who were here to ensure that we could abide by the commitment to bring in their wives and dependent children. But what happened? The courts found it very difficult to implement. What made us change the position in 1988? The European Court of Human Rights decided that what we had done was sexist. If Opposition Members want to be accused of being sexist, they had better go into the Ayes Lobby. That would be interesting.
All the wrong signals would be given outside the House if we were to vote for the Bill. When thousands of people are seeking political asylum here—many for bogus reasons —there is wide-scale abuse in immigration in this country. Opposition Members have been chuntering on today about unemployment and other matters. We are concerned as well. If we were to pass the Bill, we would make a mockery of immigration controls. Conservative Members are not prepared to do that. Opposition Members have always believed in easy immigration. They have opposed every major measure that we have introduced. The best thing that we can do this afternoon is to send the hon. Gentleman to Coventry where he belongs.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business ):—

The House divided: Ayes 98, Noes 124.

Division No. 224]
[4.52 pm


AYES


Adams, Mrs Irene (Paisley, N.)
Eadie, Alexander


Allen, Graham
Eastham, Ken


Archer, Rt Hon Peter
Edwards, Huw


Barnes, Harry (Derbyshire NE)
Ewing, Harry (Falkirk E)


Barron, Kevin
Ewing, Mrs Margaret (Moray)


Beith, A. J.
Fatchett, Derek


Bennett, A. F. (D'nt'n &amp; R'dish)
Faulds, Andrew


Benton, Joseph
Flannery, Martin


Bradley, Keith
Foot, Rt Hon Michael


Brown, Ron (Edinburgh Leith)
Godman, Dr Norman A.


Bruce, Malcolm (Gordon)
Golding, Mrs Llin


Caborn, Richard
Grant, Bernie (Tottenham)


Callaghan, Jim
Griffiths, Win (Bridgend)


Campbell, Ron (Blyth Valley)
Hardy, Peter


Canavan, Dennis
Harman, Ms Harriet


Cartwright, John
Hogg, N. (C'nauld &amp; Kilsyth)


Clwyd, Mrs Ann
Hood, Jimmy


Cook, Frank (Stockton N)
Hoyle, Doug


Cousins, Jim
Hughes, John (Coventry NE)


Cryer, Bob
Hughes, Robert (Aberdeen N)


Cummings, John
Hughes, Simon (Southwark)


Davies, Ron (Caerphilly)
Lamond, James






Leighton, Ron
Pike, Peter L.


Lewis, Terry
Powell, Ray (Ogmore)


Litherland, Robert
Quin, Ms Joyce


Livingstone, Ken
Redmond, Martin


Lloyd, Tony (Stratford)
Ross, Ernie (Dundee W)


Loyden, Eddie
Salmond, Alex


McAvoy, Thomas
Sedgemore, Brian


McCartney, Ian
Sheldon, Rt Hon Robert


Macdonald. Calum A.
Shore, Rt Hon Peter


McFall, John
Sillars, Jim


McKay, Allen (Barnsley West)
Skinner, Dennis


McKelvey, William
Smith, Andrew (Oxford E)


Maclennan, Robert
Smith, C. (Isl'ton &amp; F'bury)


McMaster, Gordon
Steel, Rt Hon Sir David


McNamara, Kevin
Steinberg, Gerry


McWilliam, John
Strang, Gavin


Madden, Max
Straw, Jack


Mahon, Mrs Alice
Turner, Dennis


Marek, Dr John
Wareing, Robert N.


Marshall, David (Shettleston)
Watson, Mike (Glasgow, C)


Marshall, Jim (Leicester S)
Welsh, Andrew (Angus E)


Martin, Michael J. (Springburn)
Welsh, Michael (Doncaster N)


Michie, Bill (Sheffield Heeley)
Winnick, David


Mowlam, Marjorie
Wise, Mrs Audrey


Mullin, Chris
Young, David (Bolton SE)


Orme, Rt Hon Stanley



Parry, Robert
Tellers for the Ayes:


Patchett, Terry
Mr. Alan Meale and Mr. Peter Hain.


Pendry, Tom





NOES


Alexander, Richard
Gale, Roger


Amess, David
Gill, Christopher


Amos, Alan
Goodson-Wickes, Dr Charles


Arbuthnot, James
Grant, Sir Anthony (CambsSW)


Ashby, David
Gregory, Conal


Aspinwall, Jack
Hague, William


Atkinson, David
Harris, David


Banks, Robert (Harrogate)
Hayes, Jerry


Beaumont-Dark, Anthony
Hayward, Robert


Beggs, Roy
Hicks, Mrs Maureen (Wolv' NE)


Bevan, David Gilroy
Hill, James


Biffen, Rt Hon John
Hordern, Sir Peter


Blackburn, Dr John G.
Howarth, G. (Cannock &amp; B'wd)


Bowden, Gerald (Dulwich)
Irvine, Michael


Bowis, John
Janman, Tim


Brandon-Bravo, Martin
Jessel, Toby


Brazier, Julian
Johnson Smith, Sir Geoffrey


Brown, Michael (Brigg &amp; Cl't's)
Jones, Gwilym (Cardiff N)


Bruce, Ian (Dorset South)
Kilfedder, James


Buck, Sir Antony
King, Roger (B'ham N'thfield)


Budgen, Nicholas
Knapman, Roger


Burns, Simon
Knight, Dame Jill (Edgbaston)


Butcher, John
Latham, Michael


Butler, Chris
Lawrence, Ivan


Carlisle, John, (Luton N)
Lloyd, Sir Ian (Havant)


Clark, Dr Michael (Rochford)
Luce, Rt Hon Sir Richard


Clark, Rt Hon Sir William
MacKay, Andrew (E Berkshire)


Colvin, Michael
McNair-Wilson, Sir Michael


Conway, Derek
Mans, Keith


Coombs, Anthony (Wyre F'rest)
Marlow, Tony


Coombs, Simon (Swindon)
Marshall, John (Hendon S)


Cran, James
Martin, David (Portsmouth S)


Currie, Mrs Edwina
Mates, Michael


Dickens, Geoffrey
Meyer, Sir Anthony


Dicks, Terry
Mitchell, Andrew (Gedling)


Dover, Den
Monro, Sir Hector


Dunn, Bob
Montgomery, Sir Fergus


Evennett, David
Moss, Malcolm


Fairbairn, Sir Nicholas
Mudd, David


Favell, Tony
Nelson, Anthony


Field, Barry (Isle of Wight)
Neubert, Sir Michael


Finsberg, Sir Geoffrey
Nicholls, Patrick


Fookes, Dame Janet
Norris, Steve


Fowler, Rt Hon Sir Norman
Onslow, Rt Hon Cranley


Fox, Sir Marcus
Paice, James


French, Douglas
Pawsey, James





Porter, Barry (Wirral S)
Taylor, Ian (Esher)


Porter, David (Waveney)
Tebbit, Rt Hon Norman


Powell, William (Corby)
Thompson, D. (Calder Valley)


Price, Sir David
Thompson, Patrick (Norwich N)


Rhodes James, Sir Robert
Thorne, Neil


Rost, Peter
Thornton, Malcolm


Sayeed, Jonathan
Townend, John (Bridlington)


Shaw, Sir Giles (Pudsey)
Viggers, Peter


Shaw, Sir Michael (Scarb')
Warren, Kenneth


Shelton, Sir William
Watts, John


Shepherd, Colin (Hereford)
Wells, Bowen


Shersby, Michael
Wheeler, Sir John


Smith, Tim (Beaconsfield)
Whitney, Ray


Spicer, Sir Jim (Dorset W)
Wolfson, Mark


Stewart, Andy (Sherwood)



Stewart, Rt Hon Sir Ian
Tellers for the Noes:


Sumberg, David
Mr. Robert G. Hughes and Mr. Stephen Day.


Summerson, Hugo

Question accordingly negatived.

Mr. Michael Brown: On a point of order, Mr. Deputy Speaker. With regard to the Division that has just taken place, will you confirm, as is usual practice, that the names of those Labour Front-Bench spokesmen who vote for the ten-minute Bill that has just been introduced, about which its promoter, the hon. Member for Coventry, North-East (Mr. Hughes), said that if a Labour Government were re-elected, there would be an abolition of——

Mr. Deputy Speaker (Mr. Harold Walker): Order.

Mr. Brown: And that Labour Front-Bench spokesmen who voted in favour——

Mr. Deputy Speaker: Order. If the hon. Gentleman persists again in disregarding the instructions of the Chair, the Chair will have no alternative but to exercise its disciplinary responsibility.

Several Hon. Members: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I shall deal with one point of order at a time. The point of order raised by the hon. Member for Brigg and Cleethorpes (Mr. Brown) was clearly bogus.

Mr. David Ashby: Further to that point of order, Mr. Deputy Speaker. Sometimes the Opposition can change the subject matter for discussion on an Opposition day. As we have now seen 18 Opposition Front-Bench spokesmen vote for a change—

Mr. Deputy Speaker: Order. I am not prepared to listen to any more of this bogus nonsense.

Mr. Tony Marlow: On a completely and utterly different point of order, Mr. Deputy Speaker. The hon. Member for Macclesfield (Mr. Winterton), who I understand is a Conservative, was elected as Chairman of a Select Committee on Health on the basis of Opposition votes only. I wonder whether you can tell the House, Mr. Deputy Speaker, whether that has ever happened before or whether it is unique.

Mr. Deputy Speaker: Order. The Chair is becoming more and more irritated by the irresponsible points of order that are being raised. We have very important business before us and we should get on with it.

Opposition Day

[19TH ALLOTTED DAY]

Government Economic Policies

Mr. Deputy Speaker (Mr. Harold Walker): Mr. Speaker has asked me to announce to the House that he will impose the 10-minute limit on speeches made between 7 and 9 o'clock and that he has selected the amendment in the name of the Prime Minister.

Mr. John Smith: I beg to move,
That this House deplores the failures of Government economic policy, which have caused a deep and damaging recession, steeply rising unemployment and sharply falling levels of output and investment; notes with concern that the United Kingdom is at the bottom of the league tables for growth, investment and job creation of the Group of Seven leading industrial nations in 1991 and is predicted to remain at the bottom in 1992; and calls upon the Government to take immediate action to promote economic recovery and an early end to recession by lowering interest rates, by stimulating investment in manufacturing and in the regions, by fostering innovation and new technology and by initiating an extensive and sustained training programme to tackle serious skill shortages and to help combat rising unemployment.
The facts about our economic situation are not encouraging. In this month's Economic Outlook from the Organisation for Economic Co-operation and Development, which surveys the economic circumstances and prospects of the major industrialised countries, can be found independent and official confirmation of the depth and severity of the recession that we are now enduring. The United Kingdom is bottom of the growth league of both the Group of Seven countries and the European Community. The United Kingdom is bottom of the investment league of the Group of Seven countries and of the European Community and it is now bottom of the employment growth league of the Group of Seven, the EC and the entire OECD. That means that we have the worst record for job creation in the whole of the industrialised world. Even more depressing than the OECD assessment for this year is that next year, 1992—when, according to the Government, we should be well into recovery—the United Kingdom will remain bottom of the G7 leagues for growth, for investment and for employment growth.
An examination of the OECD's growth league reveals that the United Kingdom has been at the bottom in 1989, 1990 and 1991, this year, and that it is forecast to remain at the bottom for a further unprecedented fourth year—next year in 1992. For four successive years, we will have been at the bottom of the growth league. Not only has that never happened to our country before; it has never happened to any G7 country before.
That is the international measure of what Conservative policies have done to our economy. The national perspective is no more encouraging. According to the Government's own figures, manufacturing output is falling at an annual rate of 6 per cent.; investment in manufacturing is down by 14 per cent. and that figure could well be an underestimate. Business failures are now at record levels and unemployment is rising inexorably: the most recent figures represent the 15th successive monthly increase. Only last week, the European

Community predicted that unemployment in 1992 would be double the 1990 level—that it would again be above 10·8 per cent., or 3 million.
Before the Government seek to discount that European Community prediction—as, I am sorry to say, their apologists have sought to do in a pretty brazen fashion —let me remind them that, far from being isolated, exceptional or extravagant, it is corroborated by a range of similar forecasts from City institutions, including UBS Phillips and Drew, Midland Montagu, Societe Generale, Yamaichi and Lloyds bank. All those institutions warn of a prospective rise in unemployment to 3 million.
Only this morning, on the "Today" programme, the chairman of the Association of British Chambers of Commerce said that he believed that we were heading for 3 million. He also said that the Government's prediction of a recovery in the second half of this year was false.

Sir William Clark: Have the right hon. and learned Gentleman and his colleagues made any estimate of the number of jobs that would be lost if a minimum wage policy were introduced?

Mr. Smith: We have heard some fantasy from the Secretary of State for Employment and other apologists for the Government, who have told us about prospective job losses. I wonder whether they will look at the facts instead of the fantasies. The OECD carried out a study, on which the Government have partly relied, of the operation of the minimum wage in France. According to that study:
The adult employment elasticity with respect to the minimum wage appears to be zero.
The hon. Member for Croydon, South (Sir W. Clark) should reflect on why 11 other countries in the European Community are able to operate a minimum wage and at the same time to have much better employment performance records than ours.
The hon. Gentleman should also realise that we must consider the issue from the point of view of justice. The other day, I received a letter from one of my constituents, Mr. David Smith—no relation, although no doubt he would be honoured to be one—of 32 Livingston drive, Plains, near Airdrie. [Interruption.] Perhaps Conservative Members will listen to the letter before rubbishing it.
Mr. Smith wrote:
I have been employed as a security guard with Securiguard Services Limited for four years. During that time I have never had a wage rise. My hourly rate is £1·83 per hour for a 60 hour week 12-hour shifts, some guards do 15–16 hour shifts. I get paid every 2 weeks and my take home pay is £210 for 120 hours.
That is a scandal, and the fact that it is permitted to happen should be on the conscience of the nation. Poverty pay is a scandal in this country. That is why Labour is determined to introduce a national minimum wage, to raise the United Kingdom to the level of the other civilised countries in the European Community.

Mr. Bob Dunn: If the right hon. and learned Gentleman consults the Register of Members' Interests he will see that I have none. I thank him for giving way so early.
As the right hon. and learned Gentleman knows, some of his shadow Cabinet colleagues have made spending commitments that have been costed at £35 billion. Will he confirm that all those commitments are Labour policy? If they are not, which have been cut or dropped?

Mr. Smith: The hon. Gentleman asks me about Labour's spending commitments in the context of the Conservative party's expensive summer campaign which, although it has been conducted all over the country, does not seem to have had a very dramatic effect on public opinion, judging by the national opinion poll that I saw this morning.
I prefer to recall what was said the day after that campaign was launched. Nomura Securities said:
It is trivially simple to ascribe inevitably arbitrary numbers to areas where the Labour Party would like to increase spending, assume that all this spending occurs at once and arrive at a huge PSBR. This is absurd.
I shall not embarrass the Chief Secretary to the Treasury by reminding him too often that The Independent observed:
Mr. Mellor's shocking arithmetic also implied a precision about Government plans which the gilts market would find amusing.
It is pretty rich for the present Government to disparage economic forecasts by others, in view of their own abysmal record. Let us examine their forecasts for recent years in regard to four key subjects: inflation, the balance of payments, growth and investment. This is important, because the Government ask us to believe their forecasts for the immediate period ahead.
The 1988 Budget forecast that, over a period, inflation would be at 4 per cent. As we know, after that inflation took off, more than doubling to reach 10·9 per cent. in October 1990. That was an error of 210 per cent. The projection on the balance of payments was equally unreliable.

Sir Ian Stewart: When did the right hon. and learned Gentleman, or any Labour spokesman, suggest that it was necessary to take monetary action to control inflation? If he cannot point to any such occasion, how does he think his own economic policy could be credible in the context of reducing inflation if he ever became Chancellor?

Mr. Smith: The hon. Gentleman should read the debate on the autumn statement of 1988, made during an important period in the development of the present circumstances. During that debate, on 14 January 1988, I said to the present Chancellor of the Exchequer:
Tax cuts would feed straight through into increased consumer expenditure, particularly in the prosperous areas, and increase overheating of parts of the economy, exaggerating regional imbalances and, above all, adding a further twist to the increasing balance of payments deficit."—[Official Report, 14 January 1988; Vol. 125, c. 485.]
That is what happened.

Sir Ian Stewart: rose——

Mr. Smith: Surely, having asked me a question, the hon. Gentleman will do me the courtesy of allowing me to reply.
I am determined to get back to my speech at some stage. Let me tell the Conservative Members to whom I have given way, however, that they do not seem to understand that inflation was caused by the present Government's inflationary own goals. We warned them repeatedly of the consequences.

Several hon. Members: rose——

Mr. Smith: I really must move on. I have given way very generously to Conservative Members, and I have a serious point to make.
There was an equally unreliable projection on the balance of payments, another important criterion which Conservative Members do not want to hear about. In 1988, the Government predicted a deficit of £4 billion; the outcome was a deficit of £15·2 billion. That was an error of 280 per cent.
As for growth, in the 1990 Budget the present Prime Minister, then Chancellor of the Exchequer, forecast growth of 1·5 per cent. between the first half of 1990 and the first half of 1991. Perhaps I am being excessively fair to him: he hinted in his Budget speech that it could be higher. On that occasion he said:
growth should return in 1991 towards its sustainable rate of around 2·75 percent."—[Official Report, 20 March 1990; Vol. 169, c. 1013.]
We know that growth over that period, from the first half of 1990 to the first half of 1991, was minus 3·1 per cent.
Even if we take the Prime Minister at his generous—from our point of view—estimate of 1·5 per cent. growth, that is an error of more than 300 per cent.
The Prime Minister, again when Chancellor, forecast in his 1990 autumn statement that fixed investment would decline by 1·75 per cent. in 1991, but in this year's Budget, only four months later, the present Chancellor was forced to revise the forecast by announcing a prospective fall of 9·75 per cent.—an error, which they managed between them, of 450 per cent.
Having regard to that record, why should we believe the Government when they tell us that recovery is round the corner? After all, did not the present Prime Minister tell us in his autumn statement of 1990 that
the British economy is coming back on track"?
There is no hint of a recession, no intimation of falling output and falling investment or of the rising unemployment which was to come. Indeed, in that same autumn statement, only eight months ago, he told us:
We shall be back into growth next year at an accelerating rate."—[Official Report, 8 November 1990: Vol. 180, c. 125.]
We know what happened and we know how absurd was the prediction of his successor as Chancellor that the recession would be "short-lived and shallow".
Given that nearly every prediction by the Government has turned out to be not only wrong, but absurdly wrong, and given that they are uniquely responsible for causing the recession with all its sad repercussions, why on earth should anyone believe them when they tell us now that recovery is on the way?
At the International Monetary Fund meeting in April this year, the Chancellor told us, as reported in the Financial Times of 30 April, that the recovery would be
somewhere around the end of the second quarter.
That is the second quarter of this year; we are now in the third quarter of this year.

The Chancellor of the Exchequer (Mr. Norman Lamont): indicated dissent.

Mr. Smith: I am surprised that the Chancellor seems to indicate dissent. Whether he knows this or that about economics, I hope that he knows that we are in the third quarter of this year. We might start from agreement on that point.
Today, the survey by the Association of British Chambers of Commerce confirms:
The country is still in the grip of deep recession and the economy will continue to shrink for some time.


[HON. MEMBERS: "Read on."] I shall be happy to read the whole lot, if hon. Gentleman want that; it goes on for page after page. I can read out the regional quotes, too. Yorkshire and Humberside chambers of commerce state:
Business confidence has taken a severe knock in the region.
The North West chambers of commerce state:
The rise in confidence seen in the last quarter appears to be slipping away.
The London chambers of commerce state:
Confidence … remains firmly negative in the manufacturing sector.
The Southern chambers of commerce state: "confidence has fallen considerably." [HON. MEMBERS: "Read on."] The South West chambers of commerce states:
Confidence in the manufacturing sector has taken a decided downturn.
I am surprised that Conservative Members want more of that evidence.
To drive the point home, the president of the association, Mr. Miles Middleton, today said:
This survey substantiates our prediction that a return to growth was unlikely this year. The country's businesses are still suffering and look set to suffer well into next year We are not yet seeing a recovery, merely a tail off in the rate of decline … It is still premature to speak of a recovery. The current economic climate remains harsh and recessive.
The message could not be clearer.
The Chancellor is always on the hunt for what he chooses to call either vague or faint stirrings. Last month on TV-am he claimed to detect these stirrings in the housing market. He told Mr. David Frost:
It may be slow at first. It will begin in certain sectors, probably in the housing market … These are just vague stirrings at the moment, but the signs are there.
The broadcast and those comments in particular provoked an angry reply from the president of the Housebuilders Federation, Mr. Upsall, who wrote the following day to the Chancellor of the Exchequer. The president may be more capable of detecting any vague or faint stirrings in his industry. He said:
I noted your comments on the Frost Programme on Sunday"—
the letter was written the day after—
about the slight indications you saw of an end of the recession. You cited the housing market as providing some evidence of this claim.
I have consulted widely within the housebuilding industry and I have to tell you that there is no foundation whatsoever for your assertion. This conclusion is also widely shared by estate agents. You and your colleagues in Government, should be fully aware that on the evidence of the housing market, the recession is deepening, not receding. Purchaser confidence has been totally eroded by unemployment or the fear of it and, as a result, lower mortgage rates have done nothing to improve sales, which have in fact slackened since a brief upturn in the market in March.
There will be no recovery in the housing market until an end to the recession is in sight and this will not occur until interest rates are further and substantially reduced. There is no doubt that your reliance for so long on high interest rates is driving the country deeper into recession, creating unnecessary unemployment and eroding the investment basis for any recovery.
I have in my possession the reply which the Chancellor sent to Mr. Upsall. I shall not bore the House by reading out the tedious defence which he deploys. We shall no doubt get it later when he makes his speech. I shall spare the House that. Bearing in mind what Mr. Upsall said, I could not but bring to the House what the right hon. Gentleman said in his reply.
Thank you for your letter of 3 June regarding my interview with David Frost. I am always pleased to hear first

hand the views of businessmen; they are a valuable addition to the information available from official statistics which are, inevitably, only available with some delay.
I hope that the right hon. Gentleman took account of the robust observations of the president of the Housebuilders Federation. If he genuinely values the opinion of business men—who am Ito doubt that?—he no doubt took note of what was said by some of them in a recent edition of a paper called The Kingston Informer. This useful publication was sent to me by Mr. Robert Markless, the excellent prospective Labour candidate for Kingston-upon-Thames. The article, under the banner headline "Lamontable", carried a sub-headline:
Businessmen Blame MP Norman Lamont for Biting Recession".
That is bad enough, but the copy starts:
Kingston's leading businessmen this week lashed out at the borough's MP, Chancellor of the Exchequer Norman Lamont, claiming the future is looking bleaker than ever.
That is only this month, 12 July. The copy continues:
Former President of the Malden and District Chamber of Commerce John Hauxwell, is so angry, he has resigned from anything to do with the Conservatives.
The builders' merchant managing director stormed:
'I have been voting for the Conservative Party for 35 years, but I have resigned from everything since last October. I am so bitter at the loss of opportunities. The Tories have wrecked everything in the last three years. I don't believe there's anything that can have any effect inside 12 months. I think this recession is as bad as the 20s. The future is looking very, very bleak for Kingston businesses.'
The article continues:
President of the Kingston Chamber of Commerce and managing director of a local printing company, Peter Jarvis, said: 'I am pessimistic in the short-term. The message to businesses is just hang on. I would certainly say in my 33 years experience of trading in Kingston, it's the worst it has ever been.'
I hope that the Chancellor writes back and deals with those criticisms which come from his constituency. I suggest that he opens his letter with:
I am always pleased to hear first hand the views of businessmen.
This debate gives the Chancellor an opportunity to tell us when the much talked about recovery is to happen. I hope that he will take that opportunity today. In particular, when will unemployment start to come down, instead of rising month after month? Can he tell us whether he agrees with the gloomy assessment made by his colleague, the Economic Secretary, when he told "Channel 4 News" on Friday 12 July—the same day that The Kingston Informer hit the streets:
I think you are not going to see significant growth until next year.
[Interruption.]—We shall check up on that because I do not want to misrepresent the Economic Secretary in any way. I am pretty sure that those were his remarks. Indeed, I heard them myself and I am inclined to believe my own recollection. If the Economic Secretary's remarks are right, how can there be recovery without significant growth? How can any economy survive the consequences of the plummeting fall in investment that is now occurring?
Recent Central Statistical Office figures officially confirmed for the first time that the level of manufacturing investment for this year will fall once again below the level achieved by the last Labour Government. It took the Conservatives nine long years to push manufacturing investment back up above the 1979 level, but I am sorry to say that it is now falling dramatically below that level again.
Because of that collapse in investment, Britain faces a serious capacity crunch. The National Institute of Social and Economic Research warned in its latest review, published only in May this year, that the level of manufacturing capacity will be reduced by some 5 per cent. by the end of this year. The institute comments:
The loss of manufacturing capacity in the early 1980s must be partly to blame for the overheating of the economy at the end of the decade … It is only too likely that the present recession will create conditions for just the same kind of overheating to occur again sometime in the 1990s, if nothing is done to compensate".
The Government have ignored those warnings made by the National Institute of Social and Economic Research, the Labour party and many others because they have convinced themselves that recovery is simply the automatic product of lower inflation and the gradual reduction of interest rates from the high levels that they have maintained in the past two and a half years.
One must ask what kind of recovery the Government are looking for. The Chancellor keeps repeating that recovery will come as lower inflation and interest rates boost consumer confidence and then consumer spending. His most revealing explanation, however, occurred last month. Speaking after the OECD Finance Ministers meeting in Paris, he said:
Consumer spending led us into recession and I expect it to lead us out.
I notice that the right hon. Gentleman is nodding. At least he remembers what he said, which is more than I can say for the Economic Secretary.
Like so many of the Chancellor's throwaway lines, that casual remark tells us all we need to know about Conservative economic strategy. They have no interest in a lasting recovery or real economic performance, but only in a short-term revival in consumer spending. They want to take us back to the familiar cycle of boom and bust; of a consumer spending spree followed by an interest rate crunch and rising unemployment; of consuming today what we should be investing in tomorrow. It is a recipe for a repeat performance of the 1980s and for another decade that begins and ends with a recession, with an inflationary boom in between. That, I fear, would be the predictable result of a fourth term for the Conservatives, and it would be a disaster for the country.
All that is desperately important because of the unique challenges that Britain faces in the single market after 1992. At one and the same time, we must face the challenge of severe competition while moving decisively to the more competitive and productive economy that some of our European partners have already achieved. To do that, recovery in the British economy must be investment-led. There must be investment in new plant and machinery, new technology, new products and new processes. There must be investment in the regions and, above all, in new skills to create the world-class work force without which success can never be obtained.
Interest rates need to be lowered to the levels of our competitors in Europe if we are to restore investment to proper levels.

Mr. Tony Marlow: May I remind the right hon. and learned Gentleman of what the hon. Member for Dagenham (Mr. Gould) said yesterday

following the statement on local government finance? He asked how my right hon. Friend the Secretary of State for the Environment could
justify the denial to local government of £2 billion which they need simply to maintain services even at their present level?" —[Official Report, 23 July 1991; Vol. 195, c. 1054.]
The hon. Member for Dagenham wants to spend £2,000 million extra on local government. Will he attain it through increased community charges, increased taxation or increased borrowing? If it is to be through increased borrowing, what impact will that have on interest rates, which the right hon. and learned Gentleman wants to bring down?

Mr. Smith: We could have had £2 billion years ago if the Government had not introduced the poll tax—[Interruption.] I am not in the mood to take lectures from Conservative Members about financial management.
I was arguing that fiscal policy must be used to encourage investment in new plant and machinery in our vital manufacturing sector. We must also seek to raise the levels of investment in research and development.

Mr. Nicholas Budgen: Will the right hon. and learned Gentleman give way?

Mr. Smith: I have given way plenty of times and I must get on with my speech.
To combat rising unemployment we need a proper temporary work programme based on three days' employment, one day's training and one day's job seeking. I am surprised that the hon. Member for Canterbury (Mr. Brazier) finds that amusing. Such a programme should be introduced to deal with rising unemployment, which is afflicting so many people —[Interruption.] The hon. Member for Canterbury might be doing some job searching of his own after the forthcoming event.
The most important investment that the country needs to make is in our people, particularly young people. It is staggering to consider that, in recession-gripped Britain, many companies face serious skill shortages. As today's Association of British Chambers of Commerce survey comments:
Particular problems of skill shortages exist in regions such as the West Midlands, where even though nearly half of manufacturing employers are shedding labour, nearly a third are reporting recruiting difficulties".
The recent National Economic Development Office report entitled "Partners for the Long Term: the Lessons from the Success of Germany and Japan" highlights the lower level of investment in what it calls human capital relative to other advanced countries. The report says:
Not only does a higher percentage of 16 to 18 year olds remain in full-time education in Germany (47 per cent. in 1987), and Japan (77 per cent. in 1988) compared with the UK (35 per cent. in 1988), but the availability of part-time education and training in craft skills is greater
in those countries.
It is little wonder, when we consider such facts, that this month's OECD Economic Outlook which, after all, the Government co-operates in compiling, drew attention to the United Kingdom's
chronic skill shortages and inadequate training of the labour force".
The OECD went on to argue that
an upgrading of vocational and general training levels would appear essential".


Given the mild language used by the OECD, which must have its copy approved by the Treasuries of the individual countries with which it deals, that is an astonishing statement.
Hon. Members know from their own experience that hardly a day goes by but someone, whether it is an industrialist, a business man, a trade unionist or a teacher, tells us what he or she knows to be true: that our training is wholly inadequate to meet the needs of a modern economy and an ambitious society. Nearly every international comparison shows, with frightening repetition, that we are not only behind the rest of the European Community, but we seem so complacent that further slipping behind is inevitable. The Government have still not restored the resources available to their previous inadequate levels. They still do not appear to accept that they have a responsibility to foster training among the employed work force as well as for the unemployed and young people. The Government say that they have no responsibility for helping to train the existing work force. Could anything be more foolish? They need urgently to revise their assessment because the other countries in the European Community do not hesitate to invest in such training. Investment in people, technology and the regions is the key.
In the 1990s in post-ERM Britain the economic agenda needs to be principally concerned with improvement in our supply side. Improving our productivity capacity and performance through investment will enable us to reduce the productivity gap between our country and our more successful competitors. It is through investment that we can create the wealth which alone can sustain higher living standards for our people and provide proper resources for our essential public services.
I say with genuine regret that that priority was absent in the locust years of the 1980s. We wasted the opportunities that were presented by North sea oil revenue. We consumed instead of investing. The House will recall that demand was stimulated by a credit free-for-all and by tax cuts for the rich. Year after year, as we went from bust to boom to bust again, crucial investment in the infrastructure, the transport system, the public services and in training and manufacturing industry was persistently neglected.
We cannot afford to make those mistakes again in the pivotal decade that lies ahead. That is why, under a Labour Government, the thrust of fiscal and monetary policy will be to create the economic conditions that will maximise investment in our productive economy. We shall aim, as the Government failed to do, at macro-economic stability instead of practising the rollercoaster economics of boom and bust. [Interruption.] Conservative Members do not like to hear that. Not only they but the public will hear it between now and the next general election.
We will promote a supply-side strategy that will improve the capacity of our industry and the skills of our people. Above all, ours will be a strategy for the long-term sustained recovery of our economy. Compare that, as the public will do in the months ahead, with the wing-and-prayer antics of a beleaguered Government desperately seeking to create the illusion of recovery, no matter how insubstantial and—to borrow a phrase from the Chancellor—however shallow and short-lived. Britain deserves a better way forward for the 1990s. The opportunity to choose cannot be long delayed. We say,
The sooner the better.

The Chancellor of the Exchequer (Mr. Norman Lamont): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
congratulates Her Majesty's Government on its pursuit of sound economic policies; notes that those policies have led to a large fall in inflation; notes also that as inflationary pressures have eased, interest rates have been cut substantially, while the £ sterling has maintained its position in the ERM; and calls on the Government to continue with its prudent policies, which will lead to a resumption of sustained growth.".
We have been amused by the right hon. and learned Member for Monklands, East (Mr. Smith). We always enjoy his speeches and he always enjoys these occasions. So do I. This is an important debate, and if the economy was in as serious a state as the right hon. and learned Member says, it would have been much more enjoyable to hear the views of the Leader of the Opposition on economic policy. His name is at the top of the Opposition motion, and it is a mystery why he cannot lead his party in an economic censure debate and give the House his carefully considered views.
The right hon. and learned Member for Monklands, East presented his usual list of selective quotations by me. I am certainly optimistic, unlike the right hon. and learned Gentleman who engaged in gloom-mongering. If he had made any effort to provide the House with an accurate representation of what I have said, it would be clear that my statements about what would happen to the economy have been consistent. I set out my view in evidence to the Treasury Select Committee in December, in the Budget in March, and in what I have said more recently. That view has been that recovery would begin in the second half of this year. I reiterate that and shall give my reasons.

Mr. Giles Radice: Will the right hon. Gentleman give way?

Mr. Lamont: I shall do so in a moment.
Since 1979, the Government have made it clear that their central objective in economic policy is the control of inflation. We promised that we would beat inflation, and that is exactly what we are doing. In recent months we have achieved some remarkable successes. Every serious measure of inflation is on a firm downward track. Even at its peak of 10·9 per cent. last October, inflation was over 4·5 percentage points lower than the average rate under the last Labour Government. Headline inflation has fallen by over 5 percentage points since October to 5·75 per cent., the lowest figure since August 1988 and lower than the last Labour Government achieved in any month in any year of their term of office.

Mr. Radice: Will the right hon. Gentleman give way?

Mr. Lamont: I shall give way when I have made more progress.
The underlying rate of inflation never rose as far as the headline rate so, of course, it has not fallen as quickly, but here, too, the trend is clearly downward. The rate of increase in the retail prices index, excluding mortgage interest payments, has come down by more than 2·5 percentage points since the autumn. That is good news.

Mr. Radice: rose——

Mr. Lamont: I shall give way in a moment. The hon. Gentleman should contain himself. I shall not give way if he persists in interrupting.
The fall in the rate of increase of the RPI is not good news for the Opposition, but I have worse news for them. Inflation will continue to fall in the months ahead. The last two CBI surveys of expected price changes have, for the first time since the 1960s, shown a zero balance. That is an excellent guide to the sort of inflation that we can expect later this year and at the end of the year.
I know that many firms have had a hard and painful struggle, but we are firmly on course for an inflation rate of 4 per cent. by the last quarter of 1991. Ours is the only major industrialised country in which inflation is lower than a year ago, and by the end of the year I expect our inflation rate to be below the EC average. That will be a remarkable achievement and should be welcomed by everyone in the House.

Mr. Radice: In his Budget statement, the Chancellor said:
there are good reasons to expect that the recovery will begin around the middle of this year".—[Official Report, 19 March 1991; Vol. 188, c. 165.]
We are now in the middle of this year. Has the recovery begun?

Mr. Lamont: The hon. Gentleman's naivety is astonishing. We are only a few weeks into the second part of the year and the statistics for output in the second quarter have not yet been published. There are some encouraging signs, such as the excellent retail sales figures which were published earlier this week. I certainly stick by what I said in the Budget statement and to the forecast at that time that the recovery would begin in the second half of the year. I expected some hon. Members, although not the hon. Member for Durham, North (Mr. Radice), to ask within a few weeks whether the recovery had started. It is extraordinary that the hon. Gentleman should ask such a question.
German inflation is expected to rise and, by the end of the year, our inflation rate may be lower than that of Germany. The right hon. and learned Member for Monklands, East did not speak about that. In an interview published in The Sunday Telegraph, the right hon. and learned Gentleman described himself in a memorable phrase as a "German nut". Surely he is impressed by the fact that, with any luck, our inflation rate will be lower than that of Germany.

Mr. Robert Sheldon: I fully understand that the Chancellor is committed to reducing inflation. There is no question about that. But it is almost 12 years ago that the same claim was made in the medium-term financial strategy—that this was a Government determined to reduce inflation. I have a copy of the document in front of me. The Government have had 12 years and at the end of that time they have the same objective as they had at the beginning. What happened meanwhile?

Mr. Lamont: I am grateful to the right hon. Gentleman for drawing attention to the fact that over the whole of this decade we have reduced inflation and reduced it massively. We reduced it far below the level of the Labour Government and, as I said earlier, the rate that we have now is below the rate achieved in any month of any year by the last Labour Government.

Mr. George Foulkes: Will the right hon. Gentleman give way?

Mr. Lamont: I will give way in a moment.
We should be proud of that success, because the reduction in inflation is not just temporary. We are in the process of making Britain a permanently low inflation country.
Unemployment is still rising, as one would expect at this stage of the cycle, but the rate of increase has slowed. They key to minimising the rise in unemployment and reducing it thereafter is labour market flexibility. The faster wage bargainers adjust to low inflation, the better the medium-term prospects for employment. Our trade union reforms, pursued in the teeth of opposition from the Labour party, have transformed the attitudes of managers and workers. More and more, there is evidence that workers are looking beyond the size of their pay cheques to take account of the long-term future of their company. If they continue to do so, employment prospects will recover relatively quickly once the recession is behind us.
However, considerable damage to long-term job prospects would be done if we were to accept a minimum wage, advocated by the Opposition, which would price hundreds of thousands of people out of their jobs, or if, as the Opposition suggest, we signed up to the social charter lock, stock and barrel.
As inflationary pressures have eased, we have been able to cut interest rates—not just once or twice, but seven times since the peak last October.

Mr. Foulkes: Will the right hon. Gentleman give way?

Mr. Lamont: If I had predicted last autumn that inflation would fall from 11 per cent. to under 6 per cent. that the pound would remain strong against the deutschmark and that we would cut interest rates from 15 to 11 per cent., the Opposition would have howled with derision. Yet that is exactly what we have achieved.
The effects of our interest rate cuts on business finances and household budgets have been considerable. Overall, industry's annual interest bill has been cut by more than £5 billion, and a family with a typical mortgage of £30,000 will see its disposable income increase by about £60 a month.

Mr. Foulkes: At last. I am grateful to the right hon. Gentleman. The Chancellor has rightly said that the level of inflation, has gone down, but it has gone down at a substantial price—a huge increase in unemployment. Does the Chancellor still think that is a price worth paying?

Mr. Lamont: As the hon. Gentleman knows, I have repeatedly made it clear that there is no conflict between fighting inflation and the long-term prospects for employment. If we give up the fight against inflation, that will be bad for long-term employment prospects. It is precisely because the Opposition are not remotely serious about fighting inflation that we do not take them seriously when they talk about unemployment. The reintroduction of unemployment in the speech made by the right hon. and learned Member for Monklands, East was noticeable. In debate after debate, when unemployment was falling for some 44 months, the Opposition never mentioned unemployment. Only now has the right hon. and learned Gentleman reintroduced it.
Our cuts in interest rates have been measured and prudent. They have not endangered sterling's position in


the exchange rate mechanism. Against the deutschmark, sterling is trading at almost exactly the level of last October. Nevertheless, we have reduced interest rates by four points during a period when German interest rates have increased. The differential between British interest rates and those of Germany is at a 10-year low and United Kingdom interest rates are now less than 1·5 percentage points above those of France.
Real interest rates in the United Kingdom are below those in France and Germany, but that does not stop the Opposition demanding yet more and larger interest rate cuts. Those are the same people who endorsed our membership of the ERM and professed to want low inflation. They cannot have it both ways. It is utterly naive to claim that we can cut interest rates more quickly and stay in the ERM and keep inflation down at the same time.
Everyone knows that Labour's policies and the disciplines of the ERM would not mix. Some Labour Members are honest enough to admit that. I could not put it better than the hon. Member for Great Grimsby (Mr. Mitchell) who said:
The first act of a Labour Government will have to be a devaluation. We can't say it publicly and we shall have to appear as respectable. Scout's honour we wouldn't do such a thing.
Policy remains tight, as it must do, to consolidate the dramatic progress that we are making on inflation. But success in the fight against inflation has enabled me to loosen monetary conditions substantially. But after every interest rate cut, the right hon. and learned Member for Monklands, East demands another. However, he does not seem to acknowledge that monetary policy operates with a substantial time lag. After every interest rate cut he demands another, even before the first has had time to have effect. Just as we forecast in the Budget, lower inflation and lower interest rates will lead to recovery. Recent statistics published are consistent with the view that I took in the Budget.

Mr. Marlow: As my right hon. Friend has already said, and as has been pointed out several times, the Opposition have a policy of spend, spend, spend. If they spent all those thousands of millions of pounds, how could they cut interest rates as well?

Mr. Lamont: My hon. Friend is correct. The Opposition have not the slightest hope of containing either interest rates or the level of taxes, which would have to shoot up dramatically as a result of their spending.
Recent statistics are consistent with the view that the pace of recession slowed in the first half of the year. GDP fell by about 0·5 per cent. in the first quarter, a little less than in the last quarter of 1990 and significantly less than in the third quarter of last year. We expect the total fall in output to be about 3 per cent., significantly less than the 5 per cent. fall in the 1980–81 recession. That fall should be set against the rise of 28 per cent. seen in the long upswing of the previous decade.

Mr. Budgen: My right hon. Friend says that monetary policy has been substantially eased and of course it is true that there will be a considerable time lag between the easing and the time that it takes effect. But surely, at the very least, the easing of monetary policy ought to be seen in the M0 figures, and M0 is increasing by only 2 per cent. at present. Does not that argue against what my right hon. Friend says?

Mr. Lamont: I fear that my hon. Friend is not correct. I intended to come to that specific point. The M0 figures show a marked increase this month and I shall be referring specifically to that. But my hon. Friend is right to say that the evidence of interest rates working is when they affect the monetary aggregates. As he well understands, it takes time for that to happen, but the evidence that it is happening on the narrow definition of money is there.
Unemployment has continued to rise, as one would expect at this stage of the cycle, but the rate of increase has slowed noticeably. The rise in June was the smallest since January. Manufacturing output continued to decline into the second quarter, but, again, at a much slower rate. Manufacturing industry has held up relatively well in the recession. The fall in output is expected to be only half that of the 1980–81 recession.
There has been some excellent news in the past week. Retail sales rose by 1·25 per cent. in June. They reached the highest level since last December, excluding the abnormally high March figure. In addition, the United Kingdom ran a current account surplus in June for the first time since 1987. That improvement was not due to a sharp fall in imports; it reflected the excellent performance of British exporters.
In the past two years, manufactured exports have increased by no less than 18 per cent. in volume terms. We have heard little from the Opposition and from the hon. Member for Dunfermline, East (Mr. Brown) about those good statistics, yet he normally appears on the television when the trade figures are announced each month. One of the newspapers compared him to a vulture with an appetite for carrion. The hon. Gentleman will be rather lean and hungry in the next few months, because the news will get better and better.
We expected business investment to fall throughout most of this year. In fact, in the first quarter it was unchanged from the last quarter of last year, and still more than 40 per cent. higher than the level that we inherited from the previous Labour Government.
Interpreting economic statistics is particularly difficult because of the effects of the Gulf war. The evidence that we have is consistent with economic recovery in the second half of the year. To deal with the point that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made, the six-month growth rate of MO has increased from about zero at the end of 1990 to 3·75 per cent. at the end of June. Consumer confidence, as measured by the EC-Gallup survey, is increasing. Output expectations—historically, a good indicator of manufacturing output and non-oil GDP—show signs of recovery. Indeed, several other surveys, including that of the Association of British Chambers of Commerce, show the same signs.
The right hon. and learned Member for Monklands, East referred to that survey. He said that he was prepared to quote all of it. He might have quoted the part that says:
Business confidence continues to rise across the country.
He might have quoted the part that says:
The signs of the end of the recession are certainly more pronounced and less elusive this quarter.
The right hon. and learned Gentleman was very selective in his quotations from the survey.
Much of economics consists of the search for the perfect leading indicator—the crystal ball that foretells the future. As my hon. Friend the Member for Wolverhampton, South-West will know, fashions change; one indicator


comes and another goes. In the past 12 years, there has been one infallible indicator of recovery—the apocalyptic prophecies of the Opposition. Ten years ago, the right hon. Member for Leeds, East (Mr. Healey) told us:
there is no light at the end of the tunnel.
We know what happened next. The second quarter of 1981 duly marked the start of the recovery, and the economy turned in eight years of sustained growth averaging more than 3 per cent.
We heard many of the opinions of the right hon. and learned Member for Monklands, East on our forecast. He did not mention the hon. Member for Dunfermline, East, who said in 1986 that there was no chance of an improvement in unemployment. Not surprisingly, that pronouncement was followed by 44 consecutive months of falling unemployment. It fell by more than 1·5 million, yet the Opposition hardly mentioned the subject. I am not saying, "Do not listen to what the Opposition say"—by all means do so—but just remember that the opposite is bound to happen.
We can be confident. We have no intention of changing course and giving an unjustified, artificial boost to demand. Recovery will come, as it always does, from businesses controlling their prices and costs and from wage bargainers adapting to low inflation. On the high streets, stores are cutting prices. That is how firms can help to beat the recession and to boost demand. The consequences of a phoney stimulus would be just as damaging for our economy as a prolonged recession. Taking the easy course might lead to a short-term boost, but in the longer term it would mean higher inflation and higher unemployment.
Our consistent refusal to take the short-term view has enabled us to achieve the success of the past 12 years. When the dust of this recession settles, the gains of the 1980s will shine through again. The 1980s was the first decade since the second world war in which the United Kingdom grew faster than France or Germany. Manufacturing productivity grew faster than in any other major industrial country. Our share of world trade in manufactures has risen in each of the past two years for the first time since records began. Perhaps the Opposition think that that is failure.
Real personal disposable income is up by more than a third since 1979. Real wealth is up by 60 per cent., and the number of shareholders has tripled. Conservative Members do not regard that as failure.
The persistent refusal of the Opposition to see anything but misery ahead is predictable but not very admirable. What I found truly mystifying about the speech of the right hon. and learned Member for Monklands, East was the gaping lack of any attempt to present a coherent alternative policy. When he became shadow Chancellor, it was hoped that he would make a better fist of it than the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). It would have been difficult to do any worse, but all we heard from the right hon. and learned Gentleman was waffle—superior to that of the Leader of the Opposition, but none the less waffle was what it was.
We used to know what the alternative strategy of the right hon. and learned Gentleman and the Labour party was. In 1983, it had an alternative economic strategy of exchange controls, import controls, massive increases in Government spending to boost demand, and the whole apparatus of planning. We must not forget that the right

hon. and learned Gentleman was among those who spoke up for those policies. What has made him change his mind? It must have been what he described as eight more years of disastrous Tory policies. The terrible failure of those years convinced him that he was wrong and we were right. That was the result.
The right hon. and learned Member for Monklands, East knows how to memorise his lines. He says that he recognises that the Government's responsibility is to get inflation down. He supports membership of the exchange rate mechanism. We even hear him talking of supply side policies. I am not entirely convinced by this puzzling, mystifying and sudden conversion. There is one real divide on economic policy between the parties—between Conservative Members, who are prepared to take the tough decisions that we know to be right, and Labour Members, who are prepared to will the ends but not the means.
The right hon. and learned Member for Monklands, East proclaims the virtues of low inflation, but he is not prepared to do what is necessary to achieve it. All of us know that the way to control inflation is to control demand, and that the way to control demand is interest rates—all of us apart from the right hon. and learned Gentleman. He is on record as saying on television, astonishingly:
We will not be using interest rates for controlling demand.
Yet the Opposition's motion specifically calls on the Government
to take immediate action to promote economic recovery and an early end to recession by lowering interest rates
and manipulating demand.
The right hon. and learned Member for Monklands, East says that we should cut rates by a full percentage point. That was his policy in October 1987, when interest rates were 9·5 per cent. It was his policy in March 1988, when interest rates were 8·5 per cent. It was his policy in October 1990, when interest rates were 15 per cent. It is his policy today. Interest rates are always 1 per cent. too high.
The right hon. and learned Gentleman has another string to his bow, but, like most Labour policies, it is inefficient, ineffective and unfair: it is credit controls, which would do nothing to increase savings or to reduce demand. Credit controls cannot reduce the overall level of interest rates, only the distribution of credit. Some people —the well advised or the wealthy—get all they want. The rest—ordinary people at the back of the mortgage queue —get nothing. Perhaps the right hon. and learned Gentleman could explain how stopping people borrowing is a painless way of reducing demand.
The right hon. and learned Gentleman claims that he is ready to answer the hard questions of economic policy. Perhaps he will answer this question: how would he deal with the inevitable sterling crisis that Labour's fiscal and monetary irresponsibility would precipitate? He has obviously given that question serious thought, because earlier this month he told the Financial Times the answer:
There will be no sterling crisis when we take power. But even if there were, all I would have to do is pick up the phone and talk to someone on first name terms.
They probably know him as John. I only hope that they remember which John.
There we have it. Now we know where the right hon. Member for Leeds, East went wrong when the last Labour


Government let spending get out of control. He need not have gone crawling to the International Monetary Fund, if only he had eaten a few more prawn cocktails. 
When the Labour party talks about supply side socialism, it is certainly serious about increasing supply —the supply of bureaucrats. According to Labour's policy documents, there would be a never-ending flow of ministries, agencies, quangos and commissions. The other day, I went through the policy document and discovered equality tribunals, contract compliance agencies, national vocational councils, development agencies, technology transfer centres, British Technology Enterprise, the Office of Technology Assessment, a Health Technology Commission—I had better stop there. It sounds like an answer from the Leader of the Opposition—not so much a citizens charter, more a bureaucrats bonanza. 
Where are the national plan of the 1960s, the social contract of the 1970s? In the dustbin of history. That is where Labour seems to be looking for its policies. From among the uncollected rubbish of failed policies, Labour comes up with the national economic assessment—the same policies, only older and mouldier; tried, tested and failed. 
Nowhere is that more apparent than when it comes to the Labour party's approach to the labour market. The Labour party opposed and resisted every one of our trade union reforms. Earlier today, when my right hon. and learned Friend the Secretary of State for Employment was before the House, we heard Labour's predictable pledge to oppose the next steps in trade union reform as well. 
We should not be surprised. The right hon. and learned Member for Monklands, East—this does not seem to be well known—was the shadow employment spokesman who led Labour's opposition to ballots before strikes and ballots in union elections. He said then that to require ballots was "intellectually disreputable", "an irrelevant effrontery" and would
gravely undermine the effective pursuit of their members' interests"—[Official Report,8 November 1983; Vol. 48, c. 170]
by unions. If that was his view then, why is it not his view today, and how do we know what his view will be tomorrow? 
The Labour party is firmly committed to removing one of the greatest competitive advantages that this country has—low marginal rates of tax. Labour's proposals would hit the small business man employing 20 people as much as it would the corporate executive employing 20,000 people. That is a strange way to encourage the recovery to get off the ground. 
Everyone knows that Labour's extravagant spending plans would mean higher taxes for everyone, not just the better-off. The right hon. and learned Member for Monklands, East and the hon. Member for Derby, South (Mrs. Beckett) do nothing to stop their colleagues going up and down the country promising massive extra spending. When the Labour party talks to the groups of voters it wants to bribe, its £35 billion worth of promises are firm commitments and high priorities; when it talks to the generality of taxpayers who would have to pay the bill, they are vague aspirations and distant goals. Either way, they are a con on the British people. 
The 1980s were successful because we took the tough decisions that were needed to get the British economy back

on track. We controlled public expenditure, reduced taxes, reformed the trade unions and privatised and deregulated industry. None of that was easy, but it was necessary.
On each of those items, the Labour party would discard our hard-won gains. Behind the presentational veneer, Labour remains committed to massive increases in public spending, borrowing and taxation, the reversal of our trade union reforms and regulation—in short, the tried and failed policies of the past.
We are beginning to see the rewards of fiscal and monetary discipline: we are within sight of our goal—much lower inflation. Inflation is coming down; we have been able to cut interest rates, while keeping the currency strong; and we have certainly laid the foundations for the recovery of the economy. The evidence for that is growing daily. We know it, Labour knows it and the country knows it too. I invite my right hon. and hon. Friends to reject the Labour party's motion.

Mr. Peter Kilfoyle: Forgive me, Mr. Deputy Speaker, if I stumble over the proprieties peculiar to the House, but I am the newest Member and a comparatively naive one—naive enough to believe that I can replace the late Eric Heffer in Parliament.
As everyone knows, Eric Heffer was a Member who was loved and respected by many hon. Members on both sides of the House and by many far beyond this place. Who could fail to be moved by the tremendous battle that he put up against his terrible illness? Yet the people of Liverpool, Walton have sent me here to represent them in this place.
I know that, conventionally, one is expected to be non-controversial in one's maiden speech. The paradox is that my constituents have been subject to great controversy during the past 12 years. They have been squeezed between two conflicting yet symbiotic tendencies. On the one hand, they have suffered from that sterile ideological throwback—the Militant Tendency. That malignancy has been cast to its political doom from the tarpeian rock of the Walton by-election.
More insidiously detrimental to their well-being has been that other confrontational and mendacious tendency within Government, promising all and delivering nothing. The Government will shortly be called to account at the ballot box. The electors of Liverpool, Walton have already given their verdict, with the Tories' worst by-election result since 1980. It has been a judgment on the Government's declared "managed decline" of a great city. There is no doubt that the Government's perverse economic policies have effected their objective of running down the city of Liverpool and its citizens.
Nearly 27 years ago, Eric Heffer made his maiden speech. In it he highlighted, after 13 years of Conservative government, the areas of neglect that particularly concerned him. It was with a sense of déjà vu that I read through them in that speech.
Then unemployment on Merseyside as a whole was 24,000; now it is 7,403 in the division of Walton alone, notwithstanding the fiddled figures. The independent assessment of the unemployment unit shows a far worse situation, with one in three people unemployed in some wards in Walton and a total of 11,027 people unemployed, nearly 27 per cent.
Eric underlined the population drift as jobs went. He spoke of 42,000 people lost to the north-west. Under the Government, we have lost 335,000 manufacturing jobs in the north-west—35 per cent. of the total. Many of those were in Liverpool as jobs were lost at Tate and Lyle, Standard Triumph, Dunlop, Hartley and many other firms —thus, the population drift has quickened to a flood.
Other concerns of Eric's included the lack of skills training, the neglect of the transport infrastructure and the uncertain regional policy. Yet what do we have today? The Government have frozen the upgrading of the main north-west railway line. That line was planned as our high-speed link to the channel tunnel, but now there is no track, no rolling stock and no engines or any terminals appropriate to it. There have been massive cuts in regional aid in the north-west—down by more than 70 per cent. —which is the biggest single cut of any region. There has been a chaotic approach to training which leaves my city and many others bereft of the skills needed to compete in the modern world.
Instead, we have been assured that prosperity will come to all, even Liverpool, on the basis of the trickle-down theory. It is what the novelist Joseph Heffer characterised as the Milo Minderbender school of economics: what is good for Milo is good for the country. That is not the case. There has been no trickle down to the people of Liverpool. Life has grown steadily worse under the Conservative Government. We have a council that is making painful decisions in order to stay within the law; we have a vibrant voluntary sector which struggles to relieve the worst effects of Government-inspired deprivation; and we have supportive private businesses, loyal to the city which demand more constructive recognition of their contribution to the city's regeneration.
In short, we have a city of many talents battling against the odds to be part of the economic mainstream of life. Liverpool deserves the motto of Everton football club, "Nihil satis nisi optimum"—nothing but the best is good enough. Of course, the people of Liverpool realise that we have little hope of that under a Conservative Government. Hence we have a paltry two Conservative councillors out of 99 in the city and no Tory Member of Parliament. It is well understood that our economic revival will come only with a Labour Government.
Having sacrificed too many aspirations on the altar of political and economic dogmatism, will this Government not now relent in the remaining months which they have left and expiate some of their sins? What does it profit a party if, having won government, it suffers the loss of its own soul?
Let me tell of what has happened to my constituents. One of my closest friends in Walton, after nine years on the dole, at 39 years of age, married with three children, finds that he cannot afford to take up the university place he has won through hard struggle. He would be worse off by between £9 and £12 a week. Where is the incentive there? 
Another constituent, at 27 years of age, married with two children, has applied for 524 jobs without success. He approached me during the by-election with the words, "I'm sorry to bother you, I'm just one of the unemployed". Imagine the low self-esteem implied in those words. He has had his pride crushed out of him. That is what the

Government have achieved—a generation without jobs, prospects or even hope. Is it any wonder that my people treat their promises with derision? 
When Oscar Wilde cynically defined democracy as bludgeoning of the people by the people for the people",
he may have had Liverpool in mind. We have certainly been well and truly economically bludgeoned by Government policy. We prefer to see democracy in a purer light—
noble in motive and far reaching in purpose". 
We then ask ourselves, where is the nobility and purpose in record unemployment, stagnant production, social deprivation and human misery, attributable to 12 years of Government mismanagement? This Government will not be forgiven, but will be remembered in Keynes' words as
the slaves of some defunct economist. Madmen in authority who hear voices in the air and are distilling their frenzy from some academic scribbler of a few years back".

Sir Peter Hordern: It is a privilege to follow the hon. Member for Liverpool, Walton (Mr. Kilfoyle). I was one of those who heard his predecessor, the late Eric Heffer, make his maiden speech, and I concur with every word that the hon. Gentleman said about him. Eric Heffer had many friends on both sides of the House, not only in his own party. He was as critical of his own party as he was of the Conservative party.
The hon. Member for Walton made a rather contentious speech in which he criticised the Government. That is not supposed to happen in a maiden speech—[HON. MEMBERS: "Why not?"] I do not object to that in the smallest way. I only recall that Eric Heffer was as likely to criticise his own Front-Bench spokesmen as he was to criticise what was then the Opposition. I am sure that the whole House looks forward to hearing the hon. Gentleman on many occasions in the future, and I am certain that he will be a worthy representative of his constituents, just as his predecessor was.
It must have been difficult for the shadow Cabinet to choose last week the subject for this Supply day debate. No doubt they wanted, at the end of the Session, to have a good rousing round-up debate on the economy. Unfortunately for them they picked the subject too late to change it. Just two days ago, it became clear that the economy was changing rapidly for the better. Clearly, the Opposition could not foresee the mistake of picking a Supply day debate of this type that would be held after such excellent trade figures and the beginning of the retail recovery, two factors which came rather earlier than even I had expected.
The right hon. and learned Member for Monklands, East (Mr. Smith) has been highly critical of the Government again today, and his criticism appears to become more strident as time goes on. I do not believe that elections are won in this House, or by party political broadcasts, or by critical articles in the newspapers. On the whole, they are won by ordinary men and women deciding who the next Government should be on issues that have little to do with party politics as we discuss them in this House.
In order to confirm that, I looked up the economic statistics for the past 20 years to see what had happened in the seven elections that I have fought. I discovered that disposable income must be higher than it was in the


previous quarter; that the savings ratio must be falling, because people are more confident about the future and are spending more than they did in the previous quarter; that consumer expenditure must be rising because of the same feeling of confidence; and that interest rates must be falling. Any Government during the past seven elections who got all four factors right have always won—and any Government who have got even one of them wrong have always lost. I offer that information to the right hon. and learned Gentleman for what comfort there is to be gained from it.
Three of those factors are already in place, and we need confirmation in the next two months to ensure that the fourth is in place, too. Judging by the statistics for the past seven for the elections, I would say that we can safely go to the country in November or October, or we may have an even better chance next year.
The economy is clearly looking up, and not before time. The right hon. and learned Member for Monklands, East made his usual critical speech but was rather less clear about his own policies. He did not deny—perhaps he will give us further details—that the Labour party will spend a great deal of money—we estimate £35 billion. We have not heard the exact figures, but it is certain that he proposes to increase taxation—he admits as much.
It is also certain, that if the Labour party ever formed a Government, it would have to borrow a great deal of money, not merely because of what it proposes to spend but because of it, renationalisation programme, particularly for the water authorities. This is the area of which the hon. Member for Derby, South (Mrs. Beckett) is in charge. Apart from the costs of compensating shareholders—£6 billion or £7 billion—a Labour Government would have to take into account the borrowing requirement that will arise because of the capital expenditure on which the water authorities are already engaged, amounting to about £20 billion over the next 10 years.
That represents an enormous increase in the public sector borrowing requirement. It will inevitably have a hard impact on the Government's standing in the gilt-edged market and the Labour party has not foreseen that.

The Financial Secretary to the Treasury (Mr. Francis Maude): Does my hon. Friend agree that the House should be given a further opportunity to hear from the right hon. and learned Member for Monklands, East (Mr. Smith) how he proposes to deal with the important point that my hon. Friend has highlighted?

Sir Peter Hordern: I should be delighted to give way to the right hon. and learned Gentleman to hear what he has to say. We have not yet had a proper chance to discuss this matter. It is stupidity itself to take on a capital expenditure programme such as that to which all the water authorities are committed and to count it as a public sector borrowing requirement. That would shatter confidence.
Some people think that the trade figures are bound to deteriorate as soon as the economy picks up again. That is to ignore two factors. First, it is most unlikely that there will be a repetition of the recent scale of borrowing and the domestic consumer expenditure on which it is based. People in this country have had a severe jolt from the

amount of borrowing and the costs of the interest payments on it. I doubt whether the scale of domestic consumer expenditure of the past few years will be repeated.
Secondly, I note that the volume of exports is higher than that of imports for the first time since 1987, and that we have a surplus in trade in manufactured goods, and that we have a surplus with the European Community. I cannot recollect how long it is—it must be a long time —since all three factors have occurred at once. I do not believe that there is any reason why that new trend should not continue. I say that not because I think that there has been a dramatic improvement in productivity at home but because of the changed conditions in the European Community particularly in Germany and the large increase in demand that has come from that country, 
The figures are much better than they look. There is a large positive balancing item of £1·5 billion in the latest national accounts, and that is in the first quarter alone. That balancing item is almost always positive. Therefore, the balance of payments is characterised by strong portfolio and direct investment abroad, from which we are continuing to gain direct benefit.
The Leader of the Opposition and the right hon. and learned Member for Monklands, East criticise us for wasting the money from North sea oil. The truth is that the entire value of North sea oil has been more than replaced by our investments in the United States and other countries, from which we shall continue to derive a positive income for as far ahead as we can see. Even the strong investment overseas by British concerns and by British portfolio investment has been exceeded by the massive investment inflow into this country amounting to some £19 billion last year—more than double what it was three years ago.
I see no reason why the Japanese and Americans should not continue to invest large sums of money in our country. Japanese investment in our motor industry will lead to substantial exports to the European Community. That is already happening: the figures for last month show a large increase in our motor exports to the European Community, and there is a great deal more to come when the large investments of the Japanese and other firms take effect.
We are beginning to see export-led growth, plus growing incomes from remitted profits and dividends from abroad. Therefore, it is necessary for the market in Europe to grow.
The important result from the G7 meeting last week was the commitment that all the leaders gave to a successful conclusion of the Uruguay round. I know that that may not have caught the headlines in the same way as other things, but I believe that that commitment is more important for the future of world trade and our own economic benefit than anything else that came out of the G7 meeting. If that means, as I believe it does, a fundamental change in the common agricultural policy, it is all the better for it.
I know that there is a great deal of common feeling on both sides of the House about the need to reform the CAP. However, I notice that the Leader of the Opposition said that we must see to it that our textiles are better protected through the multi-fibre arrangement and that that industry should not be put at risk by the east Europeans. If we are to achieve economic growth, we must allow east European countries to trade freely, without barriers, with the


European Community. That is essential. They must be allowed to earn their way to prosperity, creating a market for our goods in return and an opportunity to reduce costs here.
We concentrate too much of our attention on political integration in western Europe. We must reduce the trade barriers, not just in the European Community but throughout Europe. If we want to make the most of the opportunities available, we must continue to reduce inflation. We can no longer—if we ever could—depend upon a domestic consumer boom. We must depend upon the growing European market. I believe that by the end of the year we will have a lower rate of inflation than Germany. Therefore, we must gear ourselves to exploit that market.
Our manufacturers must be sure that the value of their stocks will be maintained. That is the importance of continuing our policy of reducing inflation. People will not invest here for any length of time unless they are confident that the value of stocks will remain at least constant and that the value of the investment will be maintained. If we can reduce inflation, that investment will surely follow. Economic growth fuelled by domestic expenditure based on borrowing cannot last. That is a lesson that we have learnt during the past few years. Growth based on sustainable domestic expenditure and overseas orders is a different proposition, and that is what we are now seeing.
The Government have received much advice lately to the effect that we are uncompetitive and should devalue. I do not know how many economists wrote to The Times recently—there were many of them, although not as many as the 364 who wrote some time ago—but I disagree with them. What they have said about the need to devalue the currency is not true. For a long time in our country, economic growth was the main priority. It was meant to safeguard employment and sterling was allowed to fall. Inevitably that meant that firms became uncompetitive and paid their people too much money. Their prices became uncompetitive and eventually action had to be taken when unemployment was worse than it had been in the first place. We must get away from that cycle of disasters.
I am glad that the conquest of inflation is the main priority. If we couple that with stable exchange rates, higher prices and higher costs will not be accommodated. We are already seeing the benefit of that policy. The price of cars is being reduced. When did we last see that happen? It should have happened years ago. We must consider the attraction of stable prices, long-term investment and greater success in our export markets. That will lead to greater domestic confidence.
In the past 20 years or so, short-termism has been a product of inflation. The sooner we can eradicate that, the better. Our standard of living depends on our ability to compete. It depends on attracting investment from our own resources and from abroad and on opening new markets in eastern Europe. It depends on low tax at home and a stable regime that does not meddle. Those are the characteristics of the Government which I hope will long persist. It is the very opposite of the Labour party's policies. That is why I commend my right hon. and hon. Friends on their policies. Long may they continue with them with success.

Mr. A. J. Beith: I am glad to have an opportunity to congratulate the hon. Member for Liverpool, Walton (Mr. Kilfoyle) on his maiden speech. His comments about the late Eric Heffer found an echo in all parts of the House. I had the privilege of co-operating with Eric Heffer on a book about Christianity and faith in politics, in which he made clear, as he did on a number of occasions, the depth of his own convictions and faith. We all admired the courage with which he stood up for what he believed, regardless of who that may have brought him into conflict with. I compliment the hon. Member for Walton on the lively and robust delivery of his speech, which will stand him in good stead in future speeches in the House.
The by-election campaign will live long in the hon. Gentleman's memory as well as in mine and others. It was an unusual by-election. The hon. Gentleman fought a hard fight and won, but from reading the newspapers one would have thought that he was in danger of being defeated by the candidate from the Militant Tendency. The hon. Gentleman knew, as we did, that that was not so. The only danger was posed by the Liberal Democrat candidate who secured a high percentage of the vote. There was never the slightest chance of the Militant candidate defeating the hon. Gentleman. Indeed, Militant candidates in parliamentary elections have never had any prospects.
The sad fact is that Liverpool was landed with a Militant council not by people voting for Militant candidates but by people voting Labour. They were not told by the Labour party that they should not vote for people who had managed to acquire the Labour party label but who did not agree with the party's views. I know that the hon. Member for Walton has fought many hard battles within the Liverpool Labour party against the Militant Tendency. Those battles continue, but Militant's ability to run rings around the Labour party in Liverpool has left a sorry legacy in that city.
The hon. Member for Horsham (Sir P. Hordern) talked about what wins elections and about a formula of economic indicators that has to be right before elections can be won. One of the four items he listed in that formula was interest rates. He said that low interest rates have to be secured for a Government to win an election. He said that for the last seven elections Governments have sought to get the indicators right. The one with which they succeeded every time was interest rates because that was the one that they had within their control. Interest rates were reduced before every general election in the hope of winning those elections. Governments did not succeed in delivering on some of the other issues that the hon. Gentleman mentioned. I hope that he shares my concern that it is too easy for Governments to manipulate interest rates to pursue electoral strategies rather than to pursue the battle against inflation. There is a danger that Governments of any colour will manipulate interest rates in order to win elections.
One of the reasons—I think that the hon. Gentleman will agree—why I argue that there should be a more independent body to deal with monetary policy is that political considerations loom too large in the views of Governments. He was right to point out that those considerations are significant factors in the battle to win elections.
At this stage of the debate it is easier to step back a little from the black versus white, long-running election battle which opened the proceedings. If one listens to the right hon. and learned Member for Monklands, East (Mr. Smith), everything in the economy appears wholly black, but if one listens to the Chancellor, everything in the economy is wholly white; and we know that neither can be the case.
The British economy has some significant strengths on which it can build. We have considerable resources of energy; we have established expertise in many areas; we have a free market system and long experience of running such a system; we are members of and therefore have access to the richest free trade area in the world; we have the protection and discipline of the exchange rate mechanism and the prospect of extending it into a single currency and monetary union; and we also have the advantage of the English language—the most widely used language in business, although it sometimes seems to become a handicap when it discourages business men from learning other people's languages in which to do business more successfully.
However, there are weaknesses to be set on the other side of that balance sheet. We have a recession on a considerable scale which is not ending within anything like the time for which the Government hoped. Indeed, the Chancellor sounds increasingly like the small boy who has been told to wait for Father Christmas. As a child, I was used to being told to wait for Father Christmas for something that I wanted in October or November; but to be told in June or July to wait for Father Christmas for any prospect of the recession ending is a sign of the extent to which the Chancellor got his figures wrong and of how serious the recession is.
We also have high unemployment—2·3 million—and there is a strong prospect of its rising to 3 million. It is recognised even by the Government that our economy is beset by significant skill shortages. Inflation problems are still with us, and it is not true to say—as the Chancellor did—that every indicator of inflation is on a downward trend. Underlying inflation increased from 6·6 per cent. to 6·9 per cent. in June. Inflation is a more serious problem than the Government like to admit.
I recognise that it is a Government policy objective to get inflation down, and I support the fact that they are making it a primary objective. However, I do not think that it necessarily helps in pursuing that objective to pretend that one is doing better than one is or to say—as the Prime Minister said not so long ago—that we have inflation "by the throat". It is a rather tougher opponent than that, and the battle will be long and hard.
We also have what are recognised by international standards as low rates of investment. There is also a feeling of resentment in Britain between industry on the one hand and Governments and the City on the other. That feeling is based on industry's view that neither the Government nor the City seems to understand it. That criticism is not directed only at one Government—it is a long-standing feeling in industry—but as long as that is so, it must be tackled.
Some of the problems are the result of economic mismanagement. Much of the depth of the recession can be attributed to the scale of the credit boom which was allowed to develop. Others are attributable to a lack of long-term thinking and to a worrying unwillingness to face some of the fundamental economic decisions. The

Chancellor levelled that criticism at the Labour party, but it can also be levelled at the Government. The Government are unable to make a decision about the single biggest issue that will face the British economy—whether we are to have a single currency, and whether we shall form part of a monetary union.
I do not think that there is any difference between the Government and me about whether that issue will have a major impact on the economy. Most Ministers—whatever their varying views—agree that it is a very important decision, but the Government say that they cannot make it. They say that it must be a decision for future Parliaments to take or for another Government at another time. That is a slight move onwards from the position taken by the right hon. Member for Finchley (Mrs. Thatcher) who, whatever the formula, kept undermining it by saying, "No, no, no; never, never, never." However, such an attitude is not a sign of a Government who understand clearly where they are taking the country.
There are differences about what we are saying about the economy and what the Labour party is saying. They are evident from the fact that we tabled an amendment to the motion, although we agree with significant parts of it. One of the differences is that I do not believe that one can say every day of the week that interest rates must be 1 per cent. lower than they currently are, which is the position that the Labour party seems to have adopted at every stage. Interest rates are now very much tied to our position in the exchange rate mechanism. Two groups of people wish to challenge that.
The first group is the Labour party. Despite its acceptance of the exchange rate mechanism, it seems to believe that we could pull down interest rates by a significantly larger amount without affecting our position in the exchange rate mechanism, thereby achieving a devaluation. The second group is a group of Conservative Back Benchers who openly say that we should never have joined the exchange rate mechanism and who would welcome a devaluation.
I disagree with both groups. The exchange rate mechanism is a defence against inflation and it is important to maintain our position in it. The advantages of devaluation are almost always very short-term. If we are to ensure that interest rates and interest rate policy are used as a defence against inflation, it is important that decisions are taken by a body that makes price stability its priority. That is why we argue for a more independent central bank.
Is not it intriguing that over the past couple of days the Government have suddenly discovered the merits of central bank independence and that they are at pains to stress what value there is in the central bank being an independent body? Of course, they are considering its role in relation to banking supervision rather than in relation to monetary policy. They want to make it clear how distant they are from the bank and how little they influence its activities in matters of banking supervision. Independence is sorely needed in connection with monetary policy where a clear commitment to and responsibility for price stability is a much better basis for policy than the various pressures which land on Governments.
Another apparent difference between my party and the Labour party is the extent to which we have been prepared to set out policies to tackle unemployment. The right hon. and learned Member for Monklands, East—in answer, I


think, to an intervention—referred to Labour's temporary work programme. I searched for some time for more details of that programme and I found the origin of it in Labour's alternative budget, where it was costed net at £340 million. I do not think that any further details have been published since. It was a scheme based on—I think —three days of work, one day of training, and one day of job seeking. It might be a useful scheme, but it would be fairly limited in its impact on unemployment of the scale that we now have.
We argue that at this stage of a recession it is legitimate for Governments to target public expenditure in ways that bring a long-term benefit and which will help to ease the unemployment problem, especially if the Government do so when there are substantial capital funds tied up in local government in the form of housing receipts which local government has received over the years. Therefore, we set out a much larger programme which has a gross cost of more than £2 billion but, of course, that does not take account of the considerable amount that can be netted off because of the cost of unemployment benefits. We believe that expenditure now on repairs to housing, schools and hospitals and on energy conservation measures—especially the improvement of insulation in houses—would not be inflationary, but would lead to a long-term benefit for a significant easing of unemployment.
Any Government who want to pursue a rigorous anti-inflation policy and who know that unemployment will result, must take steps to deal with that consequent unemployment. Any Government who believe—as my party believes—in a free market economy must not ignore their responsibilities towards those who become unemployed in severe movements of the economic cycle. All over the south of England, in areas previously unfamiliar with high unemployment in most people's lifetime, there is now severe unemployment to which we in the north are more accustomed. We believe that that problem calls for much more urgent attention from the Government, and we have spelt that out in our amendment to the motion.

Mr. John Townend: The recession has been deeper and longer than most of us expected; it is a matter for regret that the Opposition seem to have enjoyed every month of it.
I shall say a few words about the effect of the recession on small businesses. In the past 18 months to two years they have faced three major problems. First, the cost of borrowing has hit those with high overdrafts very hard. However, many small businesses are not heavily borrowed; many have no borrowings at all. It is not the level to which rates rose but the length of time for which they were high that caused the real pain.
The second and probably the most important problem that small businesses face is the lack of demand. Business in many areas is still as flat as a pancake and most small businesses are reconciled to the fact that there is likely to be little or no recovery this year. We all welcome the June figures for retail sales, but they are still below last year's figures and there is little sign of improvement in the housing or car markets.
The Government's success in bringing down inflation is widely welcomed, as is the reduction in interest rates, but

over the next two or three months small businesses will be looking for even greater reductions from the Chancellor —between 1 and 2 per cent., it is hoped. From an economic point of view that is entirely feasible, because of the success of the Government's policies. Despite the recent cut in interest rates, all the economic indicators suggest more cuts. We are still in deep recession. The housing market is flat; the figures for personal spending are low; inflation continues to fall. As inflation falls, if interest rates do not fall, too, real interest rates will rise. It would be perverse for real interest rates to rise during a recession.
As we heard today, the growth in the money supply is only 3 per cent. Despite a little rise, it is still well within the Government's range. The expansion in bank credit is at a low level and wage settlements in general are falling.
Business has a legitimate grievance about wages. As in the past, the Government have expected private business to take the strain. As a result of the Government's supply side measures, the labour market is much more flexible, so wage increases in the private sector are dropping rapidly. Many small and medium-sized businesses cannot afford to award a wage increase at all, and many others are giving increases below the rate of inflation. Only a few are paying above the rate of inflation. That is a great contrast with what is happening with public sector wage settlements. Most are well above the current rate of inflation. The police are getting 8·5 per cent.; local government workers, taking into account the reduction in hours, are getting over 8 per cent.; nurses and teachers are likely to get settlements way above the rate of inflation.
It is always the same when the Government are trying to reduce inflation and achieve pay restraint. The market enables the private sector to deliver lower wage increases, but the public sector does not deliver.
The third problem facing small businesses has been getting their accounts paid. Large companies, local authorities and even Government Departments are often the major culprits. Further interest rate cuts will ease all those problems and reduce the cost of business overdrafts and mortgages. The public will have more disposable income in their pockets, and that will be reflected in demand.
I shall emphasise several worrying aspects of the British economy and point out how effective the Government's policies will be—indeed, are being—in comparison with the alternative policies offered by the Opposition. We have to accept that we have a balance of payments problem. The recent figures represent a great improvement, but we are in the depths of recession, so we would expect there to be an improvement. We must not get carried away by one month's figures.
One of the major causes of the continuing balance of payments problem is that in the past 10 or 15 years the United Kingdom has changed from being a major car exporter to a major car importer. That has made a difference of £6 billion a year to our balance of payments. We must examine the cause of the decline in the motor industry. The responsibility lies with the previous Labour Government, who increased union powers resulting in overmanning, restrictive practices, unofficial strikes, lower productivity and poor quality.
The Government have sown the seeds of a resurgence. We have reformed industrial relations, abolished the closed shop, and with our low tax policies have made this country the most attractive in Europe for investment.


Indeed, there has been major investment in the motor industry, especially by the Japanese. Plants built by Nissan, Toyota and Honda are increasing production and will continue to do so. As a result, our car exports are expanding fast. If we lose the next election and the Labour party gets back into government and carries out a policy of increasing union power and introducing a statutory minimum wage, undoubtedly that will make the United Kingdom less attractive for foreign investment.
The Labour party is always saying that it will spend more on everything. Overseas aid is one area in which it would spend more and that would drop right through and increase our balance of payments deficit.
Fiscal balance is another area of concern. One of the Government's greatest achievements has been restoring financial rectitude. Having inherited a massive public debt and public sector borrowing requirement from the Labour Government they took control. They got a grip on public spending, and from 1984–85 until last year public spending as a proportion of gross domestic product declined by 7 per cent. Far from having a large budget deficit, we had moved into significant budget surplus. The Government have repaid no less than £26 billion of the national debt and at the same time made significant reductions in levels of direct taxation.
However, I am afraid that, in the past two years, that tight control of public expenditure has been eased and it has risen in real terms. The budget surplus has disappeared and we are now forecast to be in deficit for at least three years. Current spending is running above the estimates, and I forecast that this year's budget deficit will be well above the £8 billion forecast in the Budget. Expenditure is likely to have risen as a percentage of GDP for the first time in a decade. The prospect of a balanced budget, with further tax cuts, is disappearing rapidly over the horizon.
That is why this year's public expenditure round will be critical. In an election year, civil servants in spending Ministries, local government and pressure groups all over the country have a field day. Everyone wants more and more cash and they bank on the Government not daring to say no. I urge my right hon. and hon. Friends in government to stand firm. An extra £2 billion on health will be lost; an extra 1p on the standard rate of income tax would have a considerable effect on the Government's long-term credibility—as, indeed, would an equivalent reduction. If Government expenditure is to be kept down the Government must be tough on public sector wage increases. Every effort must be made to keep increases down to the level of inflation.
I shall consider for a moment what fiscal policy would be like under a Labour Government.

Mr. Ted Leadbitter: Before the hon. Gentleman does that, does he not accept any blame for the rate of inflation, for increasing levels of unemployment or for the decline in investment in manufacturing industry? Does he ignore, reject and rebut the House of Lords report on science and technology published recently, in which the majority of his colleagues in another place said that the Government had no policy for industry, that there would be no British-owned, British-based industry in this country and that there was no policy for the national interest? Does he reject those ideas? Does he accept no responsibility?

Mr. Townend: After that speech, I certainly do not accept any responsibility and in any case I am not a

member of the Government. What I will say, however—I am noted for being somewhat honest in the House—is that I think that the right hon. Member for Blaby (Mr. Lawson) got it wrong and that the biggest mistake that my right hon. Friend the Member for Finchley (Mrs. Thatcher) made was that she did not remove him 18 months before he resigned.
What would happen under a Labour Government? The Opposition have made it crystal clear that theirs is the party of high public spending. The Labour party's record in government shows that it always increases spending. After every Labour Government's term in office, the standard of taxation is higher and the national debt larger. However much Opposition Members may protest to the contrary, the Labour party stands condemned not only by its record but by its public statements. Whenever a Labour spokesman appears on television—speaking on any issue —he always gives the same answer: "The Government have not spent enough or allocated enough resources. We must throw more cash at the problem." It does not matter whether the problem is education, health, schools, social security or overseas aid. Even with BCCI, Labour Members are calling for Government money. Last week, the Labour transport spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott) went to the scene of a rail accident in Glasgow and blamed that, too, on the lack of resources.
It is spend, spend, spend all the time. Is it any wonder that, when all Labour's promises are costed, the figure arrived at is £35 billion? I was interested to hear the right hon. and learned Member for Monklands, East (Mr. Smith) refer to Midland Montagu, a leading City firm, because, according to Midland Montagu, the cost of Labour party's policies is more likely to be £50 billion than £35 billion.
The third cause for complaint is rising unemployment. The Government's policies are starting to work. In the past three months, the rate of increase of unemployment has declined. However, we must not look forward to the past. Low interest rates and low inflation will preserve jobs and the Government's supply side measures—their freeing up of the labour market—are having a beneficial effect.
Let me give one example from my own constituency and the area surrounding it. The abolition of the dock labour scheme was bitterly opposed by the Labour party, and no one opposed it more strongly than the hon. Member for Kingston upon Hull, East, even though that indefensible and uneconomic scheme had resulted in my home city falling from third port in the country to 12th. That scheme was abolished only some 18 months ago. In the first year, the trade through the port increased by no less than 30 per cent. The container terminal that had been idle because of the manning levels demanded by the Transport and General Workers Union is now working. A major shipping line has come back to Hull and, this week, the Alexandra dock, which had been shut for nine years, has reopened. All that is the result of the supply side policies of the Government.
Training is the Labour party 's answer to unemployment and, to judge by Labour Members' speeches, its priority. We all accept the need for good and meaningful training, but in my view it cannot be the first priority. We are short of skilled people in many areas, but it is not possible to train people if they do not have a good basic education. In many areas of the country, education has been abysmal—and not for lack of resources. Since the


Government have been in power, the teacher-pupil ratio has improved significantly and the amount spent per pupil in real terms—real money, not funny money—has increased considerably. Some of the local education authorities with the worst results—most of them, I have to say, Labour-controlled—are spending more per child on teachers and are getting more Government grant than other areas.
The decline in educational standards is due to the activities of so-called progressive left-wingers who dominate the educational establishment and the teacher training colleges. Many schools have stopped teaching reading by the phonetic method and have stopped teaching tables. Spelling is virtually non-existent among certain groups of school leavers. The general level of English in many areas has declined, and I understand that some university physics departments have to spend the first year training students in mathematics, which they should have learnt at school.
The "progressives" opposed and destroyed the grammar schools, streaming and structured education and were at the forefront in the abolition of the cane. Many even opposed the whole concept of examinations. They used their power over the curriculum to change the views of our country's history and to bring race politics into our school. Parents were regarded as a nuisance; their views were not considered. What the educational establishment said had to be accepted as gospel.
As a result of falling standards, the Government have taken action. That is why they introduced the national curriculum and testing. True to form, however, the educational establishment has undermined the Government's policy—a policy demanded by parents and employers—and has subverted the common curriculum. The educational establishment has been against tests—simple pen and pencil tests such as those which we did at school, in spelling, tables, arithmetic and reading. When I was at school, we had end-of-term examinations twice a year and it caused no problem to the administration.
I am delighted not only that the Government have now grasped the problem, but that we now have a Secretary of State who will force the policy through and remove those people from the educational establishment so that the country gets the education that it deserves. That will do more than anything else to solve our future economic problems and unemployment.
Although the Government have wavered—I have been one of those who have criticised them—I feel that they are on the right lines. Their fiscal policy is responsible. Inflation is falling and recovery is on the way. The Government's supply side policies are working and will encourage job and wealth creation. Above all, their education policies are relevant and necessary. Look at the Labour party's policies. They are the policies of yesterday and are irresponsible and imprudent. Labour's answer to every problem is to throw money at it—spend, spend, spend and tax, tax, tax. That old record and those policies of yesterday are no longer practical or relevant. The Labour party really is going for broke.

Several Hon. Members: rose——

Madam Deputy Speaker (Miss Betty Boothroyd): I remind the House that there is a 10-minute limit on speeches between now and 8.50 pm

Mr. Michael Foot: As you have just reminded me, Madam Deputy Speaker, I will be caught by this damned 10-minute rule. I should like to spend half a minute of my precious time protesting about it—not because of its application in this case, because that is what has been agreed by the House, but because, having spent part of my parliamentary time on the Front Bench and a considerably longer period on the Back Benches, I think that it is great folly for Back-Bench Members to think that the 10-minute rule is good for them. It is not; it merely plays into the hands of those on the Front Benches, who have more time to speak—and no one can put a full case against a Government such as this in 10 minutes. On my calculations, Madam Deputy Speaker, that protest took only half a minute.
I should have liked another half minute—a bit longer —to pay full tribute to the speech of my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) and to recall the many occasions on which we listened to his predecessor, who, for many years, was one of my closest friends. I joined the Labour party in Walton a good time before my hon. Friend was born, so I have a special feeling about it. I am sure that all of us listened with great interest and care to what he had to say and wish him a long, prosperous, successful life in the House.
I say that especially because, like me, my hon. Friend speaks for an area of the country that has been sadly afflicted by the policies of this Government over the past 10 years. Particularly amid all the euphoric and ridiculous accounts of what is happening that we have heard from the Government Front Bench, it is right that the country and the House should be reminded of the realities of the situation.
I refer first to the prophecy of 3 million unemployed —part, I suppose, of what the Chancellor would call the "price worth paying". Even if it does not come to 3 million —and I am sad to say that it looks as though it is likely to —the loss to the nation even in the 2·5 million figure, is appalling.
I was interested in the unemployment figure of 3 million. An unemployment figure of 11 or 12 per cent. has been referred to. In my area, in Liverpool and elsewhere in areas that are afflicted by this unemployment disease, we have endured that high rate of unemployment for some time. Indeed, on occasions, the unemployment figure has risen much higher than that. 
Having listened to Conservative Members today, I do not think that they know what is happening. I am bitterly ashamed about what is happening in the main streets of my constituency in places like Tredegar, Abertillery and other places familiar to my colleagues. While the valley towns in Wales are suffering, the same can be said throughout the country. Shops are closing on a huge scale and that is partly due to the business rate.
A plague is sweeping the country. People are protesting about that plague and those protesters are not simply supporters of the Labour party. They include representatives of the shopkeepers around the country who are being forced out of business by a combination of events and by the scale of this recession. I believe that this


recession is as bad as that from 1979 to 1981. Indeed, in some places it is even worse. The Government's claim that there are signs of recovery is the greatest mistake that they have made.
There will be no recovery until there are much better long-term measures to deal with the problems and among those measures must be a reassertion of a proper regional policy. Places such as Liverpool and my constituency have, since 1979 and 1980, lost almost all their levers of assistance in regional policy. The Government told us that they would provide something better, but they took from us most of our advantages under the rate support grant and the various regional policies. As a result, the recession in our areas was deeper and that means that it will be even more difficult to get out of it. However, the Government have not listened to our protests, partly because they have few representatives from our areas.
We face heavy unemployment. One of the worst aspects of the rise in unemployment has been the way in which the Government have manipulated the figures. The Guardian suggested that one of the best proposals for the citizens charter would be to restore some respect to the Government's statistics. I suppose that the evil can be traced back to when the right hon. Member for Chingford (Mr. Tebbit) got his grubby fingers on the official unemployment statistics. Since then, we have had no faith in the unemployment figures. That complaint has come from Labour supporters and from many other quarters. Even the present prophesied unemployment figure of 3 million underestimates the real level of unemployment.
The Government's figures about poverty also give a false impression about what is happening. The figures quoted by the right hon. Member for Finchley (Mrs. Thatcher) in her famous resignation speech—or whatever it was—when she attempted to show what had happened in the country, were completely misleading, as has been shown subsequently. The real figures of poverty, which show what we are suffering in south Wales, in Liverpool and in the other so-called backward areas, are much worse. That is another area in which there should be a proper restitution of confidence in the Government's figures.
If the Government contest what I am saying, there is a simple remedy: they could appoint a committee—they have appointed committees to do other things—to examine the unemployment and poverty figures, which are two essential requirements to understand what is happening in the different parts of the country that have been most badly afflicted.
The Government could invite Sir Claus Moser, a most eminent statistician who complained some years ago about the way in which the Government manipulated the figures, to examine what is happening. I am sure that we could drive his charges home when we consider what is happening with regard to poverty in the country today. The problems today are on a much bigger scale than for many years. Under the citizens charter, the Government should establish an independent inquiry into the way in which the unemployment and poverty figures have been misapplied and misused. That would help the future of this country and would enable us to understand better the real case that the Government must answer.
The Chancellor of the Exchequer, in his famous statement, said that unemployment was a price well worth paying. I am not sure when he said that whether he knew that the unemployment figure was heading for 3 million. Is

that figure a price well worth paying? Presumably it is. It appears that nothing matters other than his way of solving the problem. I believe that the country will choose a very different way to solve the terrible problem and legacy left by this Government.

Mr. Anthony Nelson: The right hon. Member for Blaenau Gwent (Mr. Foot) spoke passionately about unemployment. He was right to remind the House that, whatever the aggregate figures for unemployment, every individual case is distressing and trying. However, he did not refer to the fact that since 1979, when the Conservative Government came to office, 1 million more people are now in employment. There is still unemployment and it exists now in areas in the south, such as my constituency of Chichester, which hitherto have enjoyed relatively high employment. However, the aggregate total of employment has risen considerably under Conservative policies of free enterprise rather than under the socialist policy of subsidy.
We must also consider the international context and remember that we are not alone in this recession. It is happening elsewhere. We sometimes talk about the recession as a functiion of Government policies and domestic conservative attitudes. That is not so. Unemployment is higher in France, Spain, Italy, Ireland, Australia and Canada than it is here. We should consider these matters in relative terms.
I pay tribute to the Government and to my right hon. Friend the Chancellor of the Exchequer and his Treasury team for their decision almost a year ago to join the exchange rate mechanism. That decision, taken in the eye-teeth of political opposition from both sides of the House, was right—and I believe belated—and it has been vindicated by events.
Since we joined the ERM, interest rates have fallen 3·5 per cent. and the worst alarmist fears of those who said that interest rates would have to be kept higher or that our exchange rate would have to fall have not been realised. Those who said last November that we joined at the wrong rate and that we could not maintain our parity within the exchange rate mechanism were wrong. Just as they were wrong, and have been proved wrong, so the Government and the Treasury team were right to have made that decision then not only because of the reduction in interest rates since then but, in particular, because of the courage that they showed in the early months in not giving in to pressure to readjust downward the exchange rate within the mechanism or unduly to maintain interest rates too high.
It is very encouraging that the exchange rate is currently roughly DM2·95. It is right in the middle of the parity grid. I hope that the Bank of England and the Treasury are informally tracking the narrow band within the exchange rate mechanism rather than formally joining it at this point. If they are able informally to track the narrow band, it will give enormous confidence to the money markets. For example, when Italy moved from the wider band to the narrow band there was a major reduction in interest rates because it was seen as a sign of confidence that the currency could be maintained at that parity. Not only was there a reduction in interest rates but there was a massive


inflow of funds into Italy—almost an embarrassing inflow of funds—which put upward pressure on the exchange value of its currency.
If we can informally for the time being—perhaps as a first stage in further steps towards economic and monetary union—stay within the narrow band while not formally admitting that we are doing that, but doing it in practice, there will be real dividends for British industry, the economy, and those whom we represent in this House.

Mr. Peter Thurnham: Will my hon. Friend give way?

Mr. Nelson: If my hon. Friend will permit me, I shall not give way, as I have only a couple more minutes left and I wish to make another important point.
The priority of my right hon. and hon. Friends in the Treasury of reducing inflation is absolutely right. It is essential not only in constituencies such as mine in the south, where many businesses that have sprung up over the past few years are finding times very tough, but in the industrial heartlands of our country. For far too many years there has been insufficient investment, not by Governments with taxpayers' funds but by industry and shareholders, in grass-roots business in this country.
That has happened because of a series of related events. Because Governments have pursued policies that have led to or resulted in high inflation, our level of interest rates has had to be extremely high. Because we have not been a member of the exchange rate mechanism, interest rates have had to be much higher than they would otherwise have been. The result is that, if one has money to invest, there is a much better rate of return on investment in a bond or a fixed-interest instrument than in an equity or risk instrument.
There is, however, a much more important consequence for companies with major liquid funds. It is much easier to invest in other companies, because they show a bigger rate of return, than it is to invest in new plant and equipment. If one invests incestuously by taking over a company—say, on a price/earnings ratio of about 10—the percentage rate of return or dividend from that investment is very much higher than anything that one could get from a normal plant investment because of the low rate of return on capital employed in this country. As a result, the only people who have really invested in new plant on a major scale have been the great international companies, particularly from Japan, whose companies are much more highly rated on their stock exchanges and have much higher rates of return on their capital employed.
A big test may come—I pray that it will not—if Lord Hanson announces a bid for ICI. There is a money mountain test. Are the great British plcs with a flood of money in their coffers, incestuously to invest their money in other British companies by takeovers, or are they to do what they should do for the future well-being of our economy, which is to invest in new plant and equipment for their existing industries? That test may come. If it does not come for ICI and Hanson, it will certainly come for other British companies. If we are to lay down the grassroots of a thriving industrial economy for the future —one which will sustain our expectations of public expenditure—it is absolutely essential that British companies as well as foreign companies have the financial

incentive to invest at home. They will have that incentive only if we have a Government of prudence and responsibility, determined to restrain public expenditure and, above all, to limit the rate of inflation.
When electors have the choice, I hope that they will take into account the implications for their jobs, communities, companies and investments of the alternative policies, which offer, on the one hand, a steady movement towards lower interest rates and lower inflation and, on the other hand, the downright spendthrift policies of the Labour party which have not moved on in 10 years —uncosted policies which this Government, thankfully, have been responsible enough to try to cost and from which it is now clear that the cost to every taxpayer in the country would be massive. Nobody would escape the financial consequences of the Labour party pursuing even a modicum of the commitments that it has already set out.
Our interests and those of the country lie in backing the successful policies, which are bearing fruit, of reducing interest rates and inflation and thereby ensuring that we can once more try to build the base of an economy, rebuild our industries, built on sound financial returns on capital employed, built on international competitiveness and leading to real prosperity for our people, instead of the fear of money being squandered and overspent, as it has been year after year when we have had the misfortune of a Labour Government. I pray and hope that we shall never have one again.

Mrs. Llin Golding: I wish to declare an interest. Conservative Members frequently quote the number of my hon. Friends who are sponsored by trade unions. In future, they will be able to add my name to the list, for I am to be sponsored by the pottery workers union, the Ceramic and Allied Trades Union. I am proud to be sponsored by the pottery workers because, like many trade unions, they speak to the employers, and the employers speak to them. They listen to each other and they work together to solve the problems of the pottery industry and to maintain its fine traditions.
They need to talk to each other, because the Government do not listen to the voice of industry. They do not hear the damning words of employers as the Government's economic policies drive us deeper and deeper into recession and bankruptcies increase. The Government listen only to the few crumbs of comfort fed to them by the Confederation of British Industry, and they keep repeating them like plucked parrots swinging on their precarious perches in the hope that they can convince themselves and the nation that they have their economic policies right. Some hope.
The Ceramic and Allied Trades Union has a 95 per cent. membership of the pottery industry. That is about 28,000 people. One third of them are on short time and that is a result of the Government's economic policies. Falling sales, just in the production of bathrooms and kitchenware, have meant a loss of 500 jobs in north Staffordshire alone, and there are increasing redundancies. That is a result of the Government's policies.
I shall use the time available to me tonight to highlight how the Government's economic policies have affected industry, in particular a significant sector within the construction industry—ceramic manufacture and supply.


That sector represents a major interest in Newcastle-under-Lyme and throughout north Staffordshire. I shall highlight also how the force of the Government's planned recession is threatening long-term prospects—indeed, the existence—of that long-established and very important industrial sector.
The latest Building Employers Confederation survey shows that the recession in the construction industry is now firmly entrenched. The survey's main findings confirm that the steep downtrend in output continues, that new business inquiries are low, and that there is little confidence about future work loads. The Government's policy of encouraging the industry to invest in technological change and better management, after the recession of the early 1980s, has resulted in a big increase in spare capacity with the resultant rise in production costs. Further expected cuts in the work force could lead to a loss of vital skills.
Nearly three quarters of firms in the employers' survey reported a fall in output. Large companies which deal with high-value, long-term contracts, continue to report shrinking work loads. The Building Employers Confederation has stated that 50,000 new houses are still unsold. Phillips and Drew also estimates that more than 110,000 properties are empty due to repossessions or to builders being unable to sell.
The repairs and maintenance sector appears to have been particularly hard hit. Falling company profits have affected industrial and commercial property repairs and maintenance, while rising unemployment and depressed real disposable personal incomes have reduced housing repair and maintenance work. All those factors have led to a downturn in production not only for sanitary ware, but for table ware which is so important to the economic life of north Staffordshire. Staffordshire pottery is renowned the world over for its quality. About half of what is produced is exported. The industry thus relies heavily on reasonable interest rates and sensible management of the economy, which is something that this Government have failed to provide.
Brick producers report stockpiles of 1·5 million bricks. Their work forces have lost 3,000 jobs since September 1989. Prospects for the construction industry depend on the prospect of growth for the whole economy—and there is no sign of that.
Unemployment in this country is rising faster than anywhere else in Europe. Because of the Government's policies, someone is losing a job every 10 seconds of every day. Business failures are at a record level. The total number of business failures in the first half of this year was 23,000 many of which occurred in the construction industry. Because of the Government's economic policies, one business is failing every three minutes of every working day.
The construction employers' survey shows that three fifths of firms expect to reduce their work forces in the current quarter. The hardship in the roofing industry presents a similar picture of redundancies and reduced production. Two roof tile production plants have been closed, yet stocks remain at least 20 per cent. too high. Employers in the seven member companies of the Clay Roofing Tile Council report losing 235 employees in the year to June 1991—that is 25 per cent. of the jobs and a personal tragedy for each employee and his or her family.

Capacity is standing at 55 per cent. It is hard to imagine those companies being able to re-establish themselves or to reassemble an experienced work force.
The Government do not appear to be aware of the seriousness of the situation. This country has enough building materials to satisfy a whole year's requirements. We have a housing stock that it will take until 1993 to clear. Housing starts, both public and private, are at their lowest level since the late 1940s. It is not a problem that can be blamed on market forces; it is about confidence within the industry, favourable levels of interest rates and steady and consistent growth.
The Government advised industry to make investments to pull the economy round. Many industries did so, including those involved in building and construction, but fluctuating interest rates have placed a question mark over the wisdom of investing. If good returns cannot be guaranteed, who will be prepared to make further investment? We need a stable economy to encourage steady and consistent growth—not a growth or a demise brought about by extremes.
In the past, local authority house building has provided consistent work for many building firms. The Conservative Government's anti-local authority policies and their refusal to allow councils to replace sold-off housing stock with new housing is short-sighted. The massive problem of homelessness and the lack of homes for rental, as well as for the rehousing of those whose homes have been repossessed, could start to be solved if local authorities were allowed to use the money that they now hold from the sale of council houses to build new houses for rent. That would help not only those who are desperate for homes, but the building industry, too.
That is what an incoming Labour Government will do. We also believe that the real long-term solution is to improve the competitiveness of British industry as a whole; to improve economic growth with sustainable and reasonable interest rates, with a long-term energy policy so that fuel costs can be planned, with an integrated transport policy to allow delivery dates to be kept, and with a Department of Trade and Industry that is treated as an important and vital part of our future industrial planning. We in the Labour party know that Governments cannot solve all the problems of industry, but, at the very least, individual industries should be listened to.
It is important that the Government listen to the ceramic manufacturers, to the supply section of the construction industry and to their trade unions because they have much to say, as do all those who are involved in the construction industry. It is the Government's duty to listen and to ensure a future for all those who are employed in an industry which is of such crucial importance to our country's development in all senses of the word.

Mr. James Paice: It is abundantly clear to any hon. Member who spends much time in his or her constituency or elsewhere that there are severe problems out there in industry. That is shown in every possible way and is manifested not only through unemployment but in bankruptcies and in many other ways.
We have heard some strange assertions from Opposition Members. The hon. Member for Durham, North (Mr. Radice) asked my right hon. Friend the


Chancellor, "Did the recession end on 1 July?" or words to that effect. It is patently ludicrous to believe that one can identify the particular date on which a recession ends, any more than one could identify the particular date when it began.
Not very long ago, I spent a day on a small industrial estate in the small town of Soham in my constituency, visiting a number of businesses. The first told me that everything had been absolutely fine until that week, when it had suffered its first dramatic drop in orders. That was not very long ago and the firm had got through the winter and those difficult times. The second firm that I visited said that it was not much affected. The third firm said that it had been hit early in 1990, but that it had got over it and that things were already picking up again.
It is obvious that we cannot pretend to identify the exact time when a recession starts or ends. One reason for that is the lead time that is involved in all statistics. We must recognise that a statistic is already out of date when it is published. When the economy was overheating, that fact was clear from anecdotal evidence, but it did not show in the statistics until much later. When we went into the recession, that was clear out there, but it did not show through in the statistics until much later. Equally, the same will apply to the recovery. Only today the Building Societies Association has reported on the levels of lending in June. That report is already out of date; the June lending relates to purchasing decisions that were made by individuals in May or even in April, but, because of the time taken to complete the purchases, the first payments were made in June.
There are optimistic signs. The savings ratio is still climbing fast. That is long overdue and extremely welcome. It means that, when the expenditure does come, it will be based on and backed by savings, which is much better in the long-term interest. The housing market is showing signs of improvement, although it is slow and dependent on the part of the country. Nevertheless, it is definitely improving. Consumer confidence is also improving. The Gallup survey for Goldman Sachs shows that the consumer confidence index has risen consistently since its low point in the second quarter of last year. Housing finances were at a low point in the fourth quarter of last year, but the figures are now rising considerably. In the fourth quarter of last year, 42 per cent. of people believed that their own position would improve in the next 12 months. That proportion has now increased and half the population now believe that.
I have one or two positive suggestions for my right hon. and hon. Friends. Two are minor, but they would help. The first relates to very small businesses, which are obviously suffering. When one goes into receivership, many others follow in a domino effect. One contributory factor is that the receiver's fees take virtually every penny of the assets of the small business. That means that its creditors end up with nothing, despite the fact that its assets might have been sufficient to provide a repayment of 50p, 60p, 70p or 80p in the pound. I wonder whether we can find a way to reduce the burden of the receivership on a small business which has failed because, if we do not, it will take many more small businesses with it when it goes down.
My second point relates to the business rate. I do not want to go into all the complexities, but I believe that there is a system called the rental index which is a property market figure. If the rental index were applied to all business rateable values, current rents would be reflected, as would the current economic position. At a time of downturn, when rents drop, rates would also drop, although the national non-domestic rates system would remain.
My third and most significant suggestion, which has already been advanced by my hon. Friend the Member for Bridlington (Mr. Townend), is to introduce tax reductions. That would be the quickest way in which to stimulate consumer activity.
I do not intend to give only my own views. Various reports have been quoted today, but I should like to draw attention to the 1991 manifesto of the British Institute of Management, which lists what it considers to be requirements for effective management of the economy: first,
the control of inflation should be at the core of Government strategy";
secondly,
Government policy should aim to encourage and reward enterprise in all sectors and at all income levels";
thirdly,
the shift towards indirect taxation should continue.
Those targets are familiar to all Conservative Members, but they are less familiar to Opposition Members. The real threat to the economy's recovery comes, of course, from the rapidly receding threat of a Labour Government, and the risk of implementation of the policies that Labour promotes.
Let us examine the cost of renationalising the various bodies that we have privatised. Merely to take a controlling interest of 51 per cent. would cost £13·6 billion. If we add £5·5 billion for the ending of any privatisation proceeds that might have been budgeted for, we find that two thirds of the national health service budget in any one year would have to be spent on implementing what can only be described as doctrinaire policies. That is more than we spend on Scotland, Wales and Northern Ireland put together. I wonder whether the Opposition Members who speak for Scotland so regularly understand the implications of that.

Mr. Ian Taylor: Including the right hon. and learned Member for Monklands, East (Mr. Smith).

Mr. Paice: Indeed.
Even if no attempt was made to spend that money in one year—even if the expenditure were spread over four years of Labour government, although God forbid that it should last that long—it would still amount to more than £5 billion a year. That is more than twice the so-called gift to the wealthy conferred by the 1988 Budget, which cut the top rate of tax from 60 to 40 per cent. Labour says, however, that it will increase the top rate to no more than 50 per cent. The figures simply do not add up.
Perhaps the most evil of all Labour's policies is the proposed 9 per cent. surcharge on savings. What will that do for investment? What will it do for all those who are trying to save for the future? Clearly, Labour is still wedded to the belief that the only honest money is earned by blood, sweat and toil—that the man who risks his money for a return is not worth as much as the man who earns his living by sweating and expending energy. But


both are equally important to Britain's future. A distinction cannot be drawn between the man who earns his return by risking all that he has and the man who earns his by means of physical effort. Risk is as good as sweat.
The 9 per cent. surcharge is clear evidence that Labour still feels a basic antipathy to wealth and all its trappings. The envy and jealousy that were so obvious and commonplace in earlier decades are still there, just below the surface. They are there in Labour's policies, and if, God forbid, we were to have a Labour Government, they would be there in the practical application of those policies.
This Government's policies are right. No Government have never made a mistake, but when this Government make mistakes at least they learn from them and take the right action to put things right as soon as possible. That is what we have done in the past, and that is what we are still doing. Our action is working, and I continue to support it.

Mr. Ken Livingstone: After three quarters of uninterrupted decline in output, the shape of the current recession is now clear. It does not, however, correspond to that frequently portrayed by the press. It is not a service-driven recession, as is sometimes suggested. It is true that total service output has declined, which it did not do in the recession following 1979, but at the core of this recession is a massive decline in industrial output, Government spending, investment and exports. Any programme for recovery must therefore address those issues.
The first significant feature of the post-1990 recession is the sharpness of its onset. The initial decline in production has been more rapid than the decline following either 1979 or 1973, when the two previous most severe post-war recessions took place.
Let us start by assessing the level of gross domestic product for three quarters after each cycle peak. GDP declined by 0·6 per cent. following 1973, by 1·7 per cent. following 1979 and by 2·7 per cent. following 1990.
The decline of total consumer expenditure in the current recession is average in comparison with that seen in previous major post-war recessions. Indeed, in the third quarter of the recession—the first quarter of 1991—there was a recovery in consumer spending. The June retail figures suggest that that has continued into the second quarter of 1991.
During the three quarters since the onset of recession in the second quarter of 1990, consumer expenditure has fallen by 1·7 per cent. That is somewhat sharper than the fall that followed 1979, when consumer spending fell by 1·4 per cent. over three quarters, but not as severe as the fall that followed 1973, which was 2·3 per cent. over the first three quarters. The decline in consumer expenditure in the current recession is therefore significant; but recovery commenced early and the decline cannot be used to explain the particular severity of the onset of that recession.
The decisive feature of the onset of the 1979 recession was a massive and prolonged running down of stocks. After a rise in the first quarter of the general recession, stocks fell uninterruptedly for five quarters. By the third quarter of the 1979 recession, physical addition to stocks had fallen from plus £385 million to minus £711 million, a decline of £1·1 billion in 1985 prices.
The decline in stocks in the current recession is far less severe. A significant decline in stocks pre-dated the onset of the 1990 recession: the peak level of stock formation was achieved in the last quarter of 1988. Since the overall recession began, however, no significant further decline has taken place. The value of physical addition to stocks was minus £407 million in 1985 prices in the second quarter of 1990, and minus £579 million in 1985 prices in the first quarter of 1991. Destocking, therefore, is not a particular cause of the severity of the 1990 recession.
In addition to an average decline in consumer spending and a stock cycle that is much less severe than the one that followed 1979, less pressure in the current business cycle is being placed on domestic production by an increase in imports than in either 1973 or 1979. Between the second quarter of 1990 and the first quarter of 1991, imports fell by 4·5 per cent. That compares with a rise of 1·1 per cent. in the same period following the onset of the 1973 recession, and a 3·4 per cent. rise following the beginning of the 1979 recession. A major import surge is therefore not a cause of the decline in domestic production.
The first cause of the severity of the onset of the 1990 recession lies in the stagnation of Government spending, compared with the level in any previous post-war recession. Since the onset of the recession in the second quarter of 1990, local government expenditure has risen by 2 per cent. That has been more than offset, however, by a 3·9 per cent. fall in central Government spending. The result is a net 1·6 per cent. fall in total final Government expenditure since the onset of the recession.
That decline in final Government expenditure is unprecedented in post-war recessions. In both the 1973 and the 1979 recessions, Government expenditure rose by 1 per cent. during the first three quarters. By being the first post-war Prime Minister to cut Government spending during a recession, the current Prime Minister is actually being more Thatcherite than his predecessor. Cutting Government expenditure in a recession tends to worsen it significantly.
The second and most important cause of the rapid decline in GDP since the second quarter of 1990 is the collapse in fixed investment. The peak level of fixed investment in that business cycle was achieved in the first quarter of 1989, before the onset of the general recession.
There was, however, only a marginal decline, 2·8 per cent., before the second quarter of 1990 and the onset of the general recession. Since the second quarter of 1990, however, gross fixed capital formation has fallen by 8·5 per cent. That is an unprecedented collapse in fixed investment at the onset of a post-war recession. Fixed investment fell by only 0·2 per cent. in the three quarters following the second quarter of 1979 and by 3·1 per cent. following the third quarter of 1973. Therefore, we are experiencing by far the most rapid collapse in fixed investment at the beginning of a recession in British post-war history. The decline in fixed investment, more than anything else, explains the severity of the onset of the recession. The decline in fixed investment since the second quarter of 1990 accounts for 2 per cent. of GDP or three quarters of the total decline.
The final factor explaining the severity of the recession is the decline in exports, which is more severe than in previous recessions. During the 1973 recession, exports of goods and services rose by 6·7 per cent. in the three quarters following the onset of the recession, reflecting the need to raise exports to meet the increased price of oil


imports. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) will remember the great efforts made to achieve that. In the first three months of the recession in 1979 exports of goods and services fell by only 1·2 per cent. In the first three quarters of 1990's recession, however, exports of goods and services have fallen by 2·7 per cent., showing the incapacity of the economy to make the shift to exports to compensate for stagnant domestic demand. Although recent evidence shows some recovery in visible exports, service exports continue to be in severe crisis, offsetting the improvement in visible trade.
The shape of the recession is clear. It is driven by an unprecedented decline in Government spending, above all by a collapse in fixed investment, and by a decline in exports. It is led by a decline in industrial output, not services. Therefore, any programme for recovery must address those points. A recovery from this recession requires a reversal of the decline of Government expenditure, a programme of increased public spending and a reversal of the decline in fixed investment. That will overlap with the expansion of Government expenditure, as much of the investment required is infrastructural in character and must be supplied by the state. Finally, there must be an end to maintaining an overvalued exchange rate within the exchange rate mechanism, which prevents the development of the export market.
Those methods, particularly the expansion of Government spending and a substantial rise in fixed investments, cannot be undertaken if there is a fear of expanding the public sector in the economy. On the contrary, counteracting the fall in state spending and overcoming the inability of the private sector to provide sufficient investment requires an expansion of the public sector.
Against any measure, the Government's methods are wrong on every count. The Government are worsening the recession. They defend an exchange rate which, by any calculation, is damaging to our export markets. I support my hon. Friend the Member for Great Grimsby (Mr. Mitchell) who called for a devaluation of the pound within the ERM. We need to make certain that the devaluation undervalues the pound so that afterwards the pound can only rise. That would allow us a major reduction in interest rates, perhaps as much as 3 per cent., allowing us a real boost in exports to get the export-led growth that we want. That is the way out of the recession, contrary to everything that the Government propose.

Mr. Tim Smith: That was the true voice of the Labour party. I fear that the analysis is fatally flawed, because it is based on erroneous information. According to the Red Book, public expenditure is higher this year than last year and will be higher in real terms next year. Equally, exports are forecast to rise by 2·5 per cent. this year and we now know—

Mr. Livingstone: Will the hon. Gentleman give way?

Mr. Smith: I have 10 minutes, as the hon. Gentleman did.
Exports of manufactured goods have risen by 18 per cent. over the past two years, which is an outstanding record.
I want to talk about inflation and the inflationary culture of the United Kingdom. We have lived with this problem for 10, 20 or 30 years. We can all think of examples of pay and prices when we started out. Some 25 years ago my pay was £350 a year. I was a little chap and the price of a pint was 1s. 10d. We can remember those nonsense figures which show the problems that we have. Earnings have increased tenfold in 20 years. We still have a strongly inflationary culture.
Chancellors of the Exchequer have referred to the problem in successive Budgets. One said:
in the last twelve months, the danger of chronic cost inflation … has reappeared. There is reason to fear that the cost-inflationary process will speed up further. That, I feel, is our principal menace at present, and one which it is impossible to exaggerate. Whether or not this danger develops will depend not only on the policies of the Government, but also on decisions by leaders on both sides of industry with regard to wages, profit margins and prices."—[Official Report, 17 April 1961: Vol. 638 c. 798–9.]
That was Mr. Selwyn Lloyd. Before that we had had two years of price stability and the problem that he was addressing was 2 per cent. inflation. That demonstrates just how out of hand the problem has become since.
Fourteen or 15 years on from that Budget, successive Governments tried to deal with inflation by a series of incomes policies. None succeeded—not surprisingly, as they all tackled the symptoms, not the causes. In 1976, the Red Book, commenting on prices, stated:
by June the increase over the previous 12 months had risen to 26 per cent. At the same time average earnings were around 28 per cent. up on the previous year.
That was under a Labour Government 15 years ago. Their response was yet another incomes policy in which everybody was given £6 a week, regardless of what their pay was. That was backed up by the Remuneration, Charges and Grants Act 1975. Needless to say, that policy, too, failed completely.
It is not surprising that the following year the right hon. Member for Leeds, East (Mr. Healey) talked in his Budget about the problems of pay rises, devaluation and more pay rises. Every time we devalued we threw away the opportunity to be competitive, so the suggestion of the hon. Member for Brent, East (Mr. Livingstone) that we should devalue again is a wholly failed solution to our problems and should not be considered.
After that, more emphasis was placed on monetary policy, first, by the right hon. Member for Leeds, East, who introduced monetary targets in 1976 at the instigation of the IMF and then, with more enthusiasm, by the Conservative Government in 1979. In some ways, that policy, too, has come to the end of its useful life, perhaps because in the late 1980s there was so much financial deregulation that the targets were no longer meaningful. The Treasury has, rightly, abandoned having a target for M3 and today we have a target only for M0.
As my hon. Friend the Member for Chichester (Mr. Nelson) said, last October's decision to join the ERM was undoubtedly an historic one. It is right that we should now adopt what might be described as an external discipline to ensure, first, that we get inflation down and, secondly, that having got it down we keep it down.
On 14 July in The Sunday Telegraph, Gavyn Davies pointed to the success of the Government's policy over the past 10 months. As my right hon. Friend the Chancellor said, who would have forecast 10 months ago that inflation would halve and interest rates would come down four points while, at the same time, sterling remained


steady within the ERM during that period? That is the scale of the achievement. It is a great achievement that inflation should be down, interest rates should be down and at the same time our trade performance has improved. Exports increased during that period even though the ERM's critics said that we had gone in at too high a rate. Above all, people in industry want stability, because a stable exchange rate enables business to determine the prices at which it has to sell, and life is made a good deal easier. Such a stable exchange rate applies throughout the largest market that is available to us—the European Community free trade area.
As soon as it makes sense, we should move to the narrow bands of the ERM, because there are gains to be had from the Government's economic policies. A strong monetary policy and membership of the ERM are buttressed by a tough fiscal policy. As we approach another spending round, I shall be preaching to the converted when I say to the Chief Secretary that it is essential to maintain firm control of public spending in 1992–93. That is the Chief Secretary's job, but he must pursuade his colleagues in spending Departments to continue with the policy that has proved so successful over the past 12 years.
In that context I was glad to hear about the announcement by the Secretary of State for Trade and Industry of an agreement between Sir Bryan Carsberg, the director of Oftel, and British Telecom on licence modifications. Those modifications were necessary because of an obstacle to the privatisation of the remainder of BT shares. That has been sorted out to the advantage of BT's competitor, a small telecommunications company, which will now have free access to the BT systems.
We should compare that achievement with Labour's promises, in so far as we can discern them. The right hon. and learned Member for Monklands, East (Mr. Smith) has never called for a tighter monetary policy. Even in 1987–88 when the Government reduced interest rates in response to black Monday, a move which we can now see was wrong, the right hon. and learned Gentleman wanted them cut even more.

Mr. Frank Haynes: The hon. Gentleman supported that.

Mr. Smith: I supported him, but I got it wrong. I am sure that the hon. Member for Ashfield (Mr. Haynes) also supported the right hon. and learned Gentleman.
After black Monday, most people thought that such a crash in the financial markets was bound to have some consequences for the real economy. We now know that the real economy was in the middle of a boom, and that the decision to cut interest rates was wrong. Whatever the interest rate, the right hon. and learned Member for Monklands, East always wants to cut it. His policy would undermine the pound in the ERM and if we had the misfortune of a Labour Government the ERM policy would quickly collapse. There would be cuts in interest rates, a run on sterling and formal devaluation, and the whole policy would be rapidly discredited.
Labour promises increased public spending in almost every area. Although Labour's Treasury team tries to keep the lid on that and argues that the only commitments are to pensions and child benefit, we know that that is not true. The Opposition have said in this debate that they want

more investment in education and training. Where will that money come from? There is already a growing public sector borrowing requirement and the Government are committed to higher public spending. A Labour Government would have to do without the proceeds of privatisation. Labour's policy would be a disaster, and that is why I support the Chancellor's economic policy.

Mr. Doug Hoyle: The effrontery of Conservative Members, and especially of the hon. Member for Beaconsfield (Mr. Smith), is unbelievable. The Government's economic policy is in tatters. Conservative Members may smile, but unemployment is rising faster in this country than in any other country in Europe. It increased by about 70,000 last month. Even using the Chancellor's own figures, investment will fall by 10 per cent. on last year. Output is also falling. Where is this great success story that we keep hearing about? The Government are adept at passing the buck from one person to another, as we saw over the BCCI failure.

Mr. Tim Smith: Perhaps the hon. Gentleman could tell us about manufacturing industry.

Mr. Hoyle: The hon. Member for Beaconsfield is an expert on the City, but he is certainly not an expert on manufacturing industry. I suspect that he has never been in a factory, so I shall concentrate on a matter that he knows a little about, the collapse of BCCI.
The Governor of the Bank of England will be the fall guy, but responsibility rests with the Government and especially with the Prime Minister, who in January 1990 was Chancellor of the Exchequer. At that time, it was drawn to his attention that two executives had been laundering in Florida money that had come from drugs. On that occasion and on two others, the then Chancellor's attention was drawn to such matters and one would have thought that he would take a greater interest in what was happening in the bank. But none was taken until the crash. Many small investors have been ruined because of lack of action by two Chancellors of the Exchequer, one of whom is now the Prime Minister. They should be condemned for that.

Mr. Haynes: The hon. Member for Beaconsfield (Mr. Smith) is a City adviser.

Mr. Hoyle: That is right and, of course, he is not alone in that: the Prime Minister used to be a financial adviser, as was the Chancellor. We have a Government of the City, for the City, but they are certainly not for the people of this country.
The hon. Member for Beaconsfield invited me to turn my attention to manufacturing industry. Why have the Government been so silent about the Hanson bid for ICI? ICI employs 56,000 people, 50 per cent. of its output is exported and it spends 4–5per cent. of its output on research and development. It could be taken over by a company that spends a total of £34 million, which is 0·5 per cent. of its total output, on research and development. It has taken over other companies and stopped their research and development and, in the case of Ever Ready Batteries, it sold off marketing.
Hanson threatens the most successful manufacturing company in this country, but what do the Government say about that? They say nothing. Compared with the


Secretary of State for Trade and Industry, the Prime Minister has charisma, so it is hardly surprising that we hear nothing about that takeover bid. No other European country would stand by and see its most successful manufacturing company threatened in that way.
A few days ago, the Chancellor praised the motor industry and spoke about its export achievements. However, that industry now faces a downturn in every part of Europe except Germany. The downturn in Spain and France is about 16 per cent., which is beaten only by the downturn in this country because the home market has collapsed by 25 per cent. The sales in the motor industry in June were the lowest since 1970. Where is the success story in that? The motor industry is being crippled by the Chancellor's actions. The fact that the Government have introduced a car sales tax of 10 per cent. and increased VAT has depressed the home market, and more people will lose their jobs unless some action is taken.
The sooner we have an election the better, because the Government are inept, indolent and incompetent. As long as they remain in power, far from the economy recovering, it will grow worse. I not only echo what my constituents in Warrington say but speak for the whole country. The hon. Member for Beaconsfield seems to be amused when we talk about people being unemployed and output falling. Unfortunately for him, that is happening not only in the north and the midlands but in the south of the country. When the time comes, many Conservatives will deservedly lose their seats. Therefore, the sooner we have a change in Government, the better it will be for the country and for industry generally.

Mr. Ian Taylor: We have just heard a classically depressing speech from the hon. Member for Warrington, North (Mr. Hoyle). The problem throughout the debate has been that Opposition Members have concentrated on the problems of the economy without proposing any solutions, so they have been negative in their approach.
One would not credit the opening speech of the right hon. and learned Member for Monklands, East (Mr. Smith), who was not prepared to go into detail about the heavy burdens that a Labour Government would put on British industry. He gave no details of the problems that they would cause to the exchange rate, because the Labour party will not accept the proper discipline of the exchange rate mechanism. Nor did he mention the problems that a Labour Government would cause in terms of public expenditure because of the £35 billion-worth of pledges that the Labour party has made. If Opposition Members dispute that figure, I should be grateful if they would provide proper costings of their proposals.
A Labour Government would create problems for British industry through their complete and unquestioning acceptance of anything that comes out of the European Community's social action programme. They would create problems for the economy because they are prepared to spend taxpayers' money on renationalising industries without thinking about the cost to the current public expenditure budget and the problems that such a policy would create for the companies that would be brought back into the Government net because of the restraints on capital expenditure of the external financing limit. I wish

that they would deal with that matter and come clean on it. Constituents throughout the country would be extremely worried if utilities that are now in the private sector and benefiting from access to the private market suddenly found that they were subject to the Chief Secretary and the external financing limit.
A Labour Government would grind British industry down, destroy the prospect of an economic recovery and, through the operation of a minimum wage policy to which the Labour party is so beholden, worsen the social and employment prospects of those most exposed—semi-skilled or unskilled young people and people in the older age range who are seeking jobs. The Opposition have proposed no solutions. Indeed, all their proposals are likely to make the economy worse. I hope that the British public realises exactly what is being offered in the false prospectus of the Labour party so that, in the coming months, we can make it absolutely clear that the Government's sound, sensible policies are the only proper way forward for this country.
It was typical of the right hon. and learned Member for Monklands, East that nowhere in his speech did he note the full implications of the worldwide pattern of recovery for this country. There have been some significant and positive statements as a result of the G7 talks. They have shown that the economies of the leading industrial countries of the world are recovering, which will undoubtedly help the recovery in this country. The credit crunch that was widely feared in the USA has not been as severe as first expected. Furthermore, in several nations, both within the Community and, for example, Japan, there has now been a fall in interest rates, which will benefit this country, too.
Domestically, an important factor is at work. It will take time, but it is, nevertheless, important. It is the use of the automatic stabilisers. By allowing them to take effect, the Government have eased conditions and created the prospect of economic growth. As my hon. Friend the Member for Beaconsfield (Mr. Smith) has just said, that effect will be assisted in terms of the public expenditure round by the impact of BT's settlement with the regulators. That is a signal triumph for my right hon. Friend the Secretary of State for Trade and Industry, because he backed the regulators, which means that the customer will benefit. At the same time, however, it clears the way for further BT privatisation, the net proceeds of which will be useful for reducing the public sector borrowing requirement for this year.
Other factors should also encourage us. Low stocks in industry will mean that any pick-up should work straight through to production. The figures that my right hon. Friend the Chancellor gave in his opening speech on monetary supply now appear, in terms of M0, to be moving up to above the middle of the range that has been set by the Treasury. I believe that the latest figure is 3·25 per cent., which shows that monetary policy is beginning to create the circumstances in which growth could resume during the second half of the year. Other factors, such as the fall of the pound against the dollar and the modest pick-up in retail sales prices, will undoubtedly assist.
The moral is that the Government are right to have kept calm and been consistent in following through the policy set by membership of the exchange rate mechanism. I have raised that question many times before in the House and am a fervent advocate of the discipline set by the ERM. I can only give the Government credit for their


consistent policy of waiting for the right moment to reduce interest rates, doing it gradually, giving industry the confidence that the direction and trend of interest rates is downwards, but not giving in to the siren voices of Opposition Members, who wanted to rush to a fall in interest rates. That would have led to a dramatic rise in interest rates in the latter part of this year, when an international lack of confidence in the Government and sterling would have resulted. The Government, therefore, have pursued not only the right policy but one that is more likely to lead to a greater fall in interest rates for any fall in the rate of inflation, as international confidence in the pound continues.
Naturally, I am aware that businesses are experiencing difficulties, but the way to help them is, first, to reduce inflation and, with it, interest rates on a much more stable and permanent basis. Secondly, we should not try to reflate the economy in a panic. Rather, we should take targeted measures that would assist businesses to respond better to the signs of economic recovery that is now occurring.
We should not underestimate the measures in the Finance Bill, which were foreshadowed in the Budget. They include specific assistance to industry such as the reduction in corporation tax, an easier payments system, easier methods of VAT collection and less harassment by the Inland Revenue. All those measures will assist businesses. Once their confidence returns, they will begin to realise that the benefits that the Government have introduced in the Finance Bill will have a dramatic impact.
In that sense, although hon. Members may find it depressing talking to business men who as yet see no evidence of the upturn, there is no doubt that if, as I have tried to show, the framework of that recovery is already upon us, we will quickly find that industrial confidence will turn round. By the time the House reconvenes in the autumn, we may see a more upbeat response from British industry and, therefore, much more positive support for the Government's overall philosophy.
Even those who are concerned about the current situation of the British economy should not ignore the dramatic impact of the reforms that the Conservative Government have introduced successfully of the economy since 1979 for investors outside Britain. The flow of investment into Britain from OECD members who are outside the EC has been quite dramatic. In response to an oral question of mine on 27 June, my right hon. and learned Friend the Chief Secretary said:
Between 1984 and 1988 the United Kingdom received about one third of all inward direct investment to the EC … Inward investment in 1988 was £10 billion. In 1990 it was £19 billion."—[Official Report, 27 June 1991; Vol. 193, c. 1131.]
Much of that has gone to the regions, and in that sense it has helped jobs that would otherwise not have existed.
Inward investment depends on the continuation of the Government's policies. It depends on policies which are ultimately in the long-term interests of British industry and on our maintaining a positive role within the economic and monetary union in negotiations that are now taking place. The Government are right to be cautious in their actions. When the House reconvenes in the autumn we will see a much more positive economic picture.

Mr. Ted Leadbitter: The hon. Member for Esher (Mr. Taylor) said that it was important to reduce inflation in order to help industry. My retort to that is simple: the Conservative party should have stopped inflation rising.
The temptation today has been to give historical tutorials, going back even to primitive man if that were allowed, in order to escape the responsibility for what has happened in recent times. In an intervention I asked the hon. Member for Bridlington (Mr. Townend) whether the Government were prepared to accept responsibility for anything. I asked him if he would rebut his friends in the other place who, in a majority, in a report from the Select Committee on Science and Technology in May this year, made it abundantly clear and in precise terms that if the Government carried on in the way that they were Britain would have no home-owned manufacturing base. The report also said that the Government had no policy for industry and no industrial policy in the national interest. That was the considered view of a Committee that sat for a considerable time listening to witnesses from industry, the CBI and so on.
Yet the Government have no sense of shame whatever. We have not seen that since 1979. We have had the Westland scandal and all sorts of other scandals, but one never sees members of the Government blushing at any time. They have no sense of embarrassment. Yet the Government's amendment to the Opposition motion says that the House
congratulates Her Majesty's Government on its pursuit of sound economic policies". 
I can only assume that they have not caught them yet.
It is fascinating that when the Opposition seek to depict in the House of Commons the present situation it is difficult to get hon. Members, certainly on the Government Benches, to apply their minds to it. They try to tell us that we would not be successful in dealing with Britain's industrial problems. What neck—as a famous Prime Minister once said in the House of Commons—when there were 23,000 bankruptcies in the first half of this year. By my reckoning, 23,000 is an awful lot.
Moreover, most proprietary companies, certainly most small companies, and a substantial number of large companies—the latter with a capacity to outlast a recession over a three or four-year cycle but nevertheless finding their profit margins falling—are frightened of the bank manager telling them that their cash flow or their cash supply is in difficulty and that the bank will have to foreclose on them. There are a number of employers in those categories who cannot make any planning projections, let alone forward investment or projections of any kind in such circumstances.
Therefore, we must ask why the Government have the audacity to table such an amendment when we know, in the words of another Prime Minister, that they are frit. If the economy is in as good a state as the amendment suggests, if it is meant to be taken at its face value, I should have thought that the Government would be anxious to go to the country. I should have thought that in June, which is just behind us, we would have had an election.
If the policies that the Government are now proclaiming were successful, the Conservative party would not be frightened of the electors' vote. No one is ever frightened of the electors' vote if the economy is right and


the social structure is healthy, with the education and health services working to the benefit of people rather than in pursuit of profits. It is interesting that the Government's citizens charter talks about reducing waiting lists to two years. What a fantastic admission to make. It is like a confessional.
The Government's failure to go to the country in June is a signal that they are scared stiff of how the electorate will vote. How can the Government and Conservative Back Benchers think that they have any credibility in the country when they can get rid of a Prime Minister with 204 votes and get another one with 185? How on earth dare they go to the electorate?
I shall be retiring at the next general election. After some 28 years here, I think that I have heard it all before. This is a wonderful place, but I have found something strange: it is much easier to pursue a lie in the House of Commons than to expose the truth. It is fantastic that Members of Parliament are not good at admitting the truth. There are some fundamental reasons for that, but it is an interesting facet for older Members to deploy when we seek to wheedle out what the Government are up to.
The ramshackle training systems are principally meant to box up the figures—figures that have been tampered with 30 times—and real unemployment is nearer 4 million than 3 million. Some people are earning incomes that are so low that I wonder how they manage. A lady came to my surgery who was looking after her mother. Her slice of the total household income was £23. That was all that she was allowed to possess—not the price of a decent pair of shoes.
I listen to Members of Parliament prattling on about their incomes and to certain people in industry who are so blatantly greedy and grasping that even in the recession they cannot keep their hands out of the utility till. Chairmen of industries have received 100 per cent. salary increases—greedy, grasping, indecent people—and we expect the voters to support a Government who pretend that they did not know that that would happen. Yet Conservative Members play the merry devil about workers getting salary increases a point above inflation.
I could have spoken for a long time, but time is against me.

Mr. Quentin Davies: It is always a pleasure to follow the hon. Member for Hartlepool (Mr. Leadbitter). I am sorry I shall not be able to look forward to that pleasure after the next election. I shall attempt to follow his precept and to throw a little light on the truth.
There is an issue that has been of growing concern to Conservative Members, industry and the country in the past few months. It should also be of growing concern to Labour Members. As a result of today's debate, it has taken on a new dimension of seriousness. I speak of the statutory minimum wage. It was clear from the performance of the right hon. and learned Member for Monklands, East (Mr. Smith) that the Labour party is wedded to a policy the consequences of which it has not begun to understand.
That was brought home graphically by the fact that, in introducing his remarks on the subject, the right hon. and learned Gentleman made two fundamental mistakes. One

was a mistake of fact and the other a mistake of understanding. The mistake of fact was to say that all other members of the European Community have a statutory minimum wage. That is not true. Germany does not have a statutory minimum wage. That is an elementary but important mistake of fact. It is of more concern that the leadership of the Labour party has embarked on the policy without having carried out elementary research on the position in other members of the Community, with which we must compete.
The second mistake, which could have been a slip of the tongue were it not for the fact that the right hon. and learned Gentleman drew specific conclusions from it, was to quote from an OECD report about France, which has a minimum statutory wage. I think that I quote correctly, and verbatim, the words of the right hon. and learned Gentleman, who said that the statutory minimum wage's impact on the elasticity of demand for labour in France was zero. I am afraid that that rather showed that the right hon. and learned Gentleman had not understood the purport of the words, or that he was unaware of the meaning of the concept of elasticity. Elasticity is a measure of the rate of change of demand for a commodity in response to any change in price. It is a measure of the slope of the demand curve, not a measure of volume.
It is a dangerous illusion to suppose that the price of any commodity, including labour and wages, can be increased without, ipso facto, reducing demand for it. The idea that one can have one's cake and eat it is wrong. If a statutory minimum price were introduced for motor cars, as sure as night follows day the demand for motor cars would be reduced. We can argue about the extent to which that demand would be reduced, but let there be no illusion; demand would be reduced.
The right hon. and learned Member for Monklands, East is either naive or did not do enough home work. I am sorry that a Labour Front-Bench spokesman should try to pretend that a statutory minimum wage could be introduced without increasing unemployment and reducing the demand for labour.
The second point that I hope that the Labour party, even at the 11th hour, will address—it is obvious that it has not thought it through—is that a statutory minimum wage will reduce the demand for labour and remove the employment of those whose wages are less than the statutory minimum wage. In addition, as the trade unions, who are so well represented by Labour Members, insist on pay differentials, demand for higher wages will be created throughout the economy. That will lead to higher inflation, higher unemployment or a mixture of the two. Unless the Labour party wishes to wed itself to a policy that will cause higher inflation and higher unemployment, it should think carefully and seriously about the crazy idea of a statutory minimum wage before taking it any further.
That is not the end of the story. There is a third point that I hope that Labour Members will consider. The inept policy of a statutory minimum wage will reduce employment and output—the output of people who will no longer be employed in the economy—but will it help those at the bottom of the wage and salary scale, whom it was presumably designed to assist? The answer is that it will not. Even if employers are induced to increase the lowest wages, pari passu family credit and housing benefit will be reduced for those people. Considerable economic and human costs will be incurred, which will not benefit those whom the policy was intended to advantage.
If that is not a crazy policy, I do not know what is. The Labour party has not begun to think through the consequences of the statutory minimum wage, to which it appears to be wedded. So much the better for us if it fights the next election with a manifesto that is so fundamentally flawed that it contains such nonsense, but it will not be to the advantage of the country if, by any mishap, it were to come to power. I therefore beg it, at the 11th hour, to rethink that crazy policy, which can only bring even greater discredit on it than its other economic policies.

Mr. Geoffrey Lofthouse: Conservative Members, including the hon. Member for Stamford and Spalding (Mr. Davies), have said that the Labour party has no solution to this country's economic problems. The Conservative party, which has been in office for 12 years, has the gall to say that it has the solutions to the economic mess. Everyone agrees that the country is in a deep recession, but Conservative Members have failed to say who has been responsible for it. It cannot be the Opposition—it must be the Government. If the Government have failed to come up with the answer in 12 years, I cannot believe that the British public will put confidence in them and re-elect them.
It is no good attempting to pull the wool over the public's eyes by saying that there are improvements around the corner and that things would be much worse under another Government. I am not an economist and I cannot come up with some magic answers, but the problem must be solved. The Government attempted to solve it by just one means—high interest rates. Even primary school children understand that inflation must be controlled and know what will happen to the economy if it is not, but what matters is how it is controlled.
The Chancellor may have been flippant when he said that unemployment created by high interest rates was a price worth paying. That is his judgment. I want to highlight what high unemployment means. Many hon. Members representing constituencies in the south-east of the country have no experience of what it means, although some are beginning to know. Some hon. Members who until recently have shown little interest are beginning to panic.
I remember the posters during the 1979 election showing dole queues, with the words "Labour isn't working". Unemployment then was slightly more than half what it is today. Does that show 12 years of Government success in dealing with unemployment? It certainly does not. The problem will not be solved by one side of the House saying, "We saw those details in the Red Book last year," or talking about what someone else said last week. After 12 years, the Government are not equipped to solve the problem.
I know what unemployment means. Since 1984, constituencies such as mine have experienced a rapid rise in unemployment because of the rundown in the coal industry. No efforts have been made by the Government or anyone else to find alternative employment for those workers. There is a threat that the few remaining pits will be wiped out. Youngsters cannot find employment and are desperate for work, which means that idle hands make mischief. The crime rate, most of it petty crime, is rapidly increasing in my area and mostly unemployed youngsters are involved. I do not condone that. The West Yorkshire

police force is more than 200 policemen and civilian staff short of establishment levels. The crime rate, which was at record levels last year, is increasing. Those are the results of unemployment and of central Government control of local government finance.
Many long-established small businesses are rapidly going to the wall. Recently, a gentleman and his wife came to see me at my surgery. They told me about a small, 60 or 70-year-old business which once employed 14 men now employing only three and that they did not expect that it would continue. A few months ago, I wanted a small drive at my home tarmacked, so I rang a small firm that had been established for many years and was surprised when I was told that the men would be there in the morning. Nine men turned up to do a job that did not cost more than £1,000. The contractor told me that if they had not done that job the men would have been laid off within two or three days. Needless to say, they have since been laid off.
All that is happening because of the policy of controlling inflation through unemployment. It is all very well saying that there is sunshine around the corner and that many businesses will pick up when the upturn comes, but that is not much consolation to firms that have gone out of business because of the Government's policy.
A week last Monday, I went to meet the Princess Royal who was opening extensions at Pontefract racecourse. I spoke to two or three people whom I always knew to be strong Conservatives and they told me about their worries. One man who ran a reasonably sized business was worried about the increase in VAT. He said that last year in his firm, the "tax collectors" had taken £17·5 million in VAT for the Government. He said, sadly, that the Conservatives will lose the next election and that they deserve to do so. 
Another man, from the brewing industry, told me that he would never vote Conservative again because his business had been wrecked—

Madam Deputy Speaker: Order. The hon. Gentleman has had his 10 minutes. I am sorry to have to ask him to resume his seat.

Mr. Richard Shepherd: There are moments when one recognises that we have a severe recession. It would be wrong to pretend otherwise. My background is that of a small retailer. We retailers arc aware that we have borne the brunt of this recession, which has eaten into domestic demand in a way that I have never seen before.
It seems to me that the management of the economy comes down in the end to judgment— judgment at critical moments about the management of supply and demand and of the money supply. I regret some things from the past 10 years. When I was first elected, the idea of a floating exchange rate was central to our policies. I still hold that that is the best way to manage an economy, but I have seen the judgment change in my party, and I know that those who exercise that judgment will hold themselves accountable for its consequences.
In the past four years or so, at certain critical moments, such as black Monday, the Government's responses were the responses that I too would have made. Some of them may have been wrong, but I supported them. After black Monday, I thought it appropriate to be more generous with the money supply. The intention behind that liberality was clearly good. The Government decided that


they wanted to maintain industry and output and support the economy. On balance, perhaps the Government were too lax.
I listened carefully to the shadow spokesman on the economy, the right hon. and learned Member for Monklands, East (Mr. Smith), and I noticed that in his judgment we should have been even laxer. Perhaps we are too rigorous in my party. A great friend and colleague of mine, my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), often berates the Government for the way in which they approach these matters, but I am sure that he would have berated the management of the economy by the Opposition, had they been in power, even more. The right hon. and learned Member for Monklands, East, as I say, thought it right to be even more lax. But every consequence since black Monday would have been even worse if the right hon. and learned Gentleman had been in the driving seat.
However much I may believe that the rate of our entry to the ERM was wrong, and however wrong in principle it may have been, I cannot agree with the argument of the right hon. and learned Member for Monklands, East that interest rates should be depressed faster. As a retailer, I would give a cheer for that, but the intellectual argument flounders because interest rates are now a reflection of membership of the ERM. Lowering interest rates affects the external value of the currency. Since that is now the guiding principle of the Government's economic management, we cannot lower interest rates at the same time as maintaining the central rate of sterling against the deutschmark. That is what worries me. Is the right hon. and learned Gentleman saying, covertly, that he would devalue? Is that Opposition policy? I do not understand how one can reconcile lowering interest rates more quickly while maintaining sterling in the central band of the ERM.
From the earliest days of our membership of the ERM the Government have straightforwardly made their position plain, but I have not heard an exposition by the Opposition of the consequences of membership and of the disciplines implicit in it. I have to ask myself in a reasonable way whether I would veer towards the Opposition or towards the Government in matters affecting the administration of economic policy. Unusually for me, perhaps, I believe that the Government have set out their arguments the more clearly and to the advantage of the broad management of the economy.
This has been a dire recession, in which the consequences have moved outwards from the south-east right through the economy. We sometimes lose sight of the fact that the Opposition do not believe in economic cycles in industrial societies, but nothing has ever convinced me against the idea of a cyclical approach to life. A farmer recognises that crops are poor in bad weather and plentiful in good times. Similarly, economies go through good and bad times. We are at the bottom of a deep recession, but there are clear signs of improvement. Interest rates are declining in Japan and the United States, thereby removing one of the threats to our interest rate management. As world interest rates come down, so do ours.
If I could change Government policy, I would take Britain out of the ERM because I do not believe in a fixed exchange rate on which all else is predicated to the extent

that we narrow our economic endeavours to merely supporting the exchange rate. That is quite wrong, but it is the central intent of the Government. I also, however, recognise the consequences that flow from the Government's judgment and from lower interest rates. Interest rates are central to the economy at this stage of the management of the cycle.

Mr. Ray Whitney: Does my hon. Friend agree that the right hon. and learned Member for Monklands, East (Mr. Smith) misrepresented what happened in the 1980s? He mischaracterized the decade as two recessions linked by a false boom. That so-called false boom was actually eight years of record-breaking growth, which represented a unique upturn in the economic cycle. Anyone with a pride in this country should take pleasure in that— unlike the right hon. and learned Gentleman and the Labour party.

Mr. Shepherd: With the greatest respect, great progress was made during the 1980s, but there were also mistakes. Increasing the money supply had dire consequences. There are certain internal faults in our economy. There is the belief, often commented upon by Germans, Americans and others, that there is a get-rich-quick view in British business; the belief that one does not invest for the long term. That has been confronted by the Opposition in the past. There is the membership of Lloyd's, where it is thought that money flies to people, and there is the aggrandisement of wealth by British companies and industry, without the long building-up process.
Unfortunately, the flood of money into the economy and the fact that we were too lax had consequences. We saw the rise in property prices. I have always believed that one of the basic indicators of any economy is the way in which house prices rise. They flew out of the window. Anyone who bought a house in London at the end of the 1970s—that includes myself—for about £50,000 saw its value multiply 10 times. That is not real money, and we know it: it is a reflection of the increased money supply. That is why I judged harshly the right hon. and learned Member for Monklands, East when he was urging yet further increases in the money supply.
We are suffering the consequences of an over-generous response. That is why I do not think that there has been one upward curve over the past 10 years. I have seen the anxieties and difficulties that follow when the balance of the argument is wrong.

Mr. Whitney: That is the point that I was making. My hon. Friend and the right hon. and learned Member for Monklands, East (Mr. Smith) should not disregard the eight years of record growth. I am sure that my hon. Friend does not disregard it, since it was outstanding. There were mistakes and, quite uniquely in the political history of the country, the Government recognised that mistaken assessments were made in terms of releasing the money supply. However, the Labour party at the time did not say that the Government were reducing interest rates too far or too quickly; it said, as it always does, that interest rates should be 1 per cent. lower than the current level. That is the standard view of the Labour party.

Mr. Shepherd: The cheer of politics is that we hold Governments accountable and, as parliamentarians, we try to demonstrate why Governments may be wrong.
I agree with my hon. Friend the Member for Wycombe (Mr. Witney) to the extent that the 1980s saw great structural changes, some of which were beneficial. The underlying improvements that have been beneficial and will be beneficial should the Opposition form a Government seem to be common cause among the two Front Benches. We are concentrating our efforts on the supply side, and there are reforms in place for training and education. We all accept that there is a great deal of work still to do, and the Government are leading the way. We recognise that there have been advances and some setbacks. The attitude of many of our producers is now much firmer and more competitive. That can be seen in the improvement in our export trade, which we hope will be sustainable. That was an interesting feature of this week's figures.
The right hon. and learned Member for Monklands, East believes in the lowering of interest rates in the face of the ERM mechanism. I cannot understand that unless he is calling covertly for devaluation.

Mrs. Margaret Beckett: This is the last full-scale economic debate before the summer recess and, for all we know, it may be the last before the general election. It gives us a chance to glance back over the 12 long years of the Government's term in office. When they came to power, they inherited inflation at the European average. Today, it is above the European average. They inherited a balance of payments that had dipped marginally into deficit —about £500 million —although manufacturing trade still had a surplus of almost £3 billion. Today, in the depths of recession, the deficit is still registered in billions. The Government inherited the fruits of investment under a Labour Government which resulted in substantial revenues from North sea oil. They inherited unemployment at just over 1 million and it was still falling.
As my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) mentioned, one of the most effective slogans of the election campaign that brought the Conservatives to power was the Saatchi and Saatchi-inspired, "Labour isn't working". That slogan placed the responsibility for the levels of unemployment directly at the door of the then Government. Today, with about one vacancy for every 20 unemployed, unemployment is double the level this Government inherited and rising fast. Most commentators predict that it will touch 3 million and some predict that it will go even higher. Whose responsibility is it now? To listen to Ministers, one would almost think that it was the responsibility of the next Labour Government.
The one skill that the Government have honed to a fine degree in their 12 full years is that of passing the buck, in the same way as children pass the parcel. And what a buck it is. The inheritance of the next Government will be an economy which, at best, is just emerging from recession. It is the second recession of the Government's 12 years in power and it is shaping up to be as bad and as deep as, and even more long-lasting than, their first.
Recovery must come at some stage, but the House will know that the Association of British Chambers of Commerce —much quoted in this debate — predicted this week that there would be no recovery until next year and that the manufacturing industry —the source of our tradeable wealth —will not be in recovery until that

summer. Many hon. Members will have seen the forecast by Phillips and Drew entitled "An L of a Recession", which states that the signs are that the economy has hit bottom, but that it has every intention of staying there.
The Association of British Chambers of Commerce also said:
Orders, deliveries, employment, investment and the number of firms working at full capacity are continuing to fall.
The head of the corporate department of KPMG Peat Marwick, the accountancy firm, said that there was no evidence yet of an upturn in the economy. He continued:
I think we're going to scrape along the bottom for quite a considerable period of time.
Last week, this country hosted the conference of the Group of Seven countries. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, we are the bottom of the league of the G7 countries in growth, in investment and in job creation. Our economy is predicted to be the bottom of the G7 league for growth for four consecutive years. That is a record. That has never happened in any country before. Unemployment hit the highest monthly increase in March, and although the figures for subsequent months have, mercifully, been lower, those figures for April, May and June were higher than for any of those months in the past 40 years. That is a record, and, in the case of unemployment, it is a record achieved even after changes in the way in which the figures are collected and after the totals had been reduced 30 times.
Manufacturing output was predicted to be down 5 per cent. On the latest figures, it is heading towards being 7 per cent. down since April 1990. What of the true engine of recovery—not consumer spending, as the Chancellor says, but investment? Manufacturing investment has fallen 16 per cent. in the past year to below the levels of investment the Government inherited in 1979 and, indeed, back to the levels last seen in the 1960s. Not only can we not rebuild, but we cannot sustain a modern economy with such levels of investment, and all of that is the consequence of the Government's gross economic mismanagement.
President Truman was reported to have had a note on his desk saying, "The buck stops here." Where does the buck stop with the Government? It does not appear to stop with the Prime Minister, with the Chancellor or with the Chief Secretary to the Treasury who is, no doubt, too busy working on some of his excellent jokes to take receipt of any buck. We can be certain of one thing —in this Government, the buck never stops in the Cabinet of the day, no matter who is in it.
We all remember the claim about the economic miracle and, certainly, the Government's achievements in putting Britain firmly at the bottom of so many leagues—those for growth, investment and job creation—have been remarkable by any standards. Why did we end up at the bottom of the league after 12 years of unprecedented revenues from the North sea, unprecedented revenues from privatisation of assets and 12 years of uninterrupted power?
The House will recall that in previous debates—indeed, it has been mentioned today by the hon. Member for Aldridge-Brownhills (Mr. Shepherd)—the Government have admitted to just one mistake. That mistake was the cut in interest rates in the aftermath of the stock market crash in October 1978, and it was made not only by this Government, but by all our main competitors. The


Government have never been able —and they have never tried —to explain why, if that was such a mistake and if it was their only one, the effects in this country have been so much worse than those in any other country.
Let us consider the inflation figures. The headline rate of inflation in this country is 5·8 per cent. compared with 4·5 per cent. when we cut interest rates in 1987. In Germany, the rate is 3 per cent. and in France, 3·3 per cent. —neither as good as in 1987, but not as high as ours. Growth in France is about the same as in 1987, and in Germany it is double what it was in 1987. In Italy it is down but still growing at 1·7 per cent. That is as good a rate as this Government averaged in 12 years in office, whereas the growth here has fallen by 2 per cent.

Mr. Whitney: rose— —

Mrs. Beckett: I shall give way in a moment.
On the balance of payments, Germany, with its enormous economic adjustments, is still in surplus on its balance of payments and France is in much the same position as it was. Italy is somewhat worse, but, even in the depths of recession, our balance of payments is worse than it was in 1987. In November 1987, when the Government made the one mistake to which they will cough, we did not have the highest interest rates in Europe. We have now, even after the cuts of recent months.

Mr. Whitney: Just for once, can we be clear what the hon. Lady and her party are saying? The Government have said that it was a mistake to reduce interest rates in early 1988. Does the hon. Lady say that it was not a mistake, or that when all her hon. Friends said that interest rates should be further reduced, that was a mistake? What is her position now?

Mrs. Beckett: This will be a lesson in possessing one's soul in patience: I am coming to that point.

Mr. Whitney: Opposition spokesmen always say that.

Mrs. Beckett: In my case, it is always true.
We do not argue that the 1987 cut in interest rates was the Government's main mistake. My right hon. and learned Friend the Member for Monklands, East and the rest of the Labour party argued at the time that this would be the consequence of the course of action that the Government were then planning but had not yet carried out. They made other later mistakes, from the £6 billion in income tax cuts for the wealthy in 1988, through the inflationary own goals of 1989–90 to their one-club policy of high interest rates.
If the Government feel that they dare not admit to more than one mistake, the interest rate cut in 1987 was not the one to choose. Their big mistake was made in 1987 all right, and it flowered into full glory in 1988. It was the biggest mistake that a Government can make—they believed that they were invincible and damned near infallible. That was the key. Drunk with the self-satisfaction of their third election victory, they thought that no matter what they did and what mistakes they made they were bound to get away with it. They stopped listening to anyone. They fell prey to the eighth deadly sin —culpable conceit.
We have only to recall the words of the Prime Minister in 1988, when he was Chief Secretary to the Treasury:

During the 1960s we praised and envied the German economic miracle. In the 1980s the position has been precisely reversed." —[Official Report, 26 April 1988; Vol. 132, c. 214.]
Only a Government who thought that they could get away with murder would combine in the same year massive cuts in income tax for the richest people in the country with massive cuts in benefits for children, pensioners, the unemployed and people with disabilities.

The Economic Secretary to the Treasury (Mr. John Maples): Come on.

Mrs. Beckett: I assure the Minister that there were at least £600 million to £800 million of cuts in benefits. If he does not know that, I suggest that he looks up the facts. 
Only a Government who thought that they could get away with murder would introduce the poll tax or defend the interest rate increases needed to block their inflationary own goals with the words, "If it isn't hurting, it isn't working". Only a Government who thought that they could get away with murder would shove up VAT to pay for cuts in the poll tax and expect people to be grateful for their generosity.
Only a Government who thought that they would never be defeated and were certain to be elected for a fourth term would have dared to embark on the folly, incompetence and disastrous waste of the policies that have led us into the recession. 
I am often asked by people outside the House —many of them former supporters of the Government —whether the Government still believe what they say. Perhaps they still do; in the House they give that impression. But whether they have lost self-confidence or not, they have lost the confidence and respect of millions of people. They deserve to lose it, because they are a Government who cheat.
The number of people unemployed rises dramatically, so they stop counting hundreds of thousands of them. The number of people on hospital waiting lists increases, so they will stop publishing the lists. They condemn huge salary increases for the bosses of privatised utilities, but they do not mention that they agreed to those increases in advance, while saying, "Don't tell the public." They cut income tax in 1988 and made us pay for it in our mortgages in 1989, 1990 and 1991. They have cut the poll tax and are making us pay for it through increased VAT. It is all sleight of hand, all excuses, all special effects. It is certainly no accident that it was under this Government that we first heard the phrase "economical with the truth".

Mr. Simon Burns: Will the hon. Lady say whether it is the Labour party's policy to go back to collecting the unemployment statistics on precisely the same basis on which they were collected in 1979?

Mrs. Beckett: We certainly believe that unemployment statistics should be collected on a consistent basis across the Community, which they are not at the moment.

Mr. Burns: Ah!

Mrs. Beckett: I should be happy to see them go back to being collected on the original basis, but we need a fresh assessment of the precise way in which they are collected to put collection on a fair and sound basis, and as we are apparently moving towards greater integration— —

Mr. Burns: Answer.

Mrs. Beckett: I can say to the hon. Gentleman specifically that I should be quite happy to see the statistics collected on the old basis, although it may be that we need a basis precisely comparable with that used in the rest of Europe. For all the hon. Gentleman's clever points. there are just as many people unemployed, and the whole point is that they do not show up in the Government's figures. They are out of work every day for just as long; the Government's method of collecting the statistics makes no difference to them.
The Chancellor was at it again today. He said that every serious measure of inflation was on downward trend. The trend may be down, but who would have recalled, from the Chancellor's words, that the figures which he said until recently were the most reliable and the most effective — the core figures; the underlying rate of inflation— were actually up in the last month by both the measures recently advocated by the Treasury? 
The Government claim that there has been no underfunding in the national health service and that their reforms will solve all the outstanding problems. In that case, why are the staff in opted-out hospitals threatened with dismissal if they talk about what they know? And how, by the way, does that square with the citizens charter? I have not quite come to terms with that. The Government claim that there is no underfunding in education and that the pursuit of high standards comes from structural changes, including schools opting out of the local authority and the provision of city technology colleges. If funding is irrelevant, why do opted-out schools and city technology colleges get far more funding than the rest of our schools?
It is also cheating when the Government imply that, when inflation comes down further, as we all know it will, and when we get a recovery, our problems will be well-nigh over. An article in The Independent of 23 July said that the position would soon look much stronger, but it continued:
we should not assume that the real economy will look equally secure.
Similarly, Professor McWilliams of the CBI warned us the other day that, over the period since 1988,
the recession will cost the United Kingdom in terms of economic growth forgone about twice as much as it gained from 1985 to 1988 from excess growth.
Professor McWilliams reportedly continued:
this downswing has set the economy back by a number of years
The Government spend their time in excuses and deceits. They have nothing to offer for the future but more of the same. The Chief Secretary said, in an incredibly complacent speech on 15 May this year:
we can be proud of our record on public spending and taxation … It has been a major achievement to have brought public spending down to about 40 per cent. of national output in the 1980s. We remain committed to that approach." — [Official Report, 15 May 1991; Vol. 191, c. 286–89.]
The Chancellor said again today that the Government have no intention of changing course.
We can expect more of the same, which means more income tax cuts — down, they say, to 20p in the pound — more opted-out hospitals, more opted-out schools, more privatised monopolies with more fat salaries for those who run them and more bills for the public. We can expect more of the same mistakes that got us where we are today. Among our competitors in the EC, in the OECD, in the G7, Governments are struggling to find resources to fund investment in manufacturing and sustained investment in education and training. They are struggling to find

sustained investment in research and development and in the transport infrastructure. That does not necessarily require vast sums when things are tight, but it needs a steady, planned and sustained programme in a stable environment.

Sir Peter Hordern: The hon. Lady has criticised the Government for not funding the health service and the education service properly, she has expressed her admiration for the Europeans for their consistent expenditure on transport and infrastructure and she has expressed her desire to increase the proportion of GNP borne by public expenditure. How will she pay for all that?

Mrs. Beckett: Is the hon. Gentleman saying that an Opposition can be taken seriously only if they put forward detailed, planned and costed programmes on public expenditure?

Sir Peter Hordern: Yes.

Mrs. Beckett: I am delighted to hear that. I suggest that the hon. Gentleman re-reads the Conservative party election manifesto of 1979. The nearest thing that he will find in that manifesto to a detailed commitment on public spending are the words:
Those who look … for … detailed commitments on every subject will look in vain." 
When discussing the progress of our economy and that of the German economy, the Foreign Secretary said in the spring of 1990 that the Germans succeed by
doing the things and taking the steps that we failed to do.
That was very accurate, but it is not what his colleagues have said in the House. The programme of needed investment takes years. Under this wasteful Government, we have not even started that programme.
The Government are still cutting Government support for industry and training. Even in the depths of a recession that is exacerbated by skills shortages, the Government are cutting support for training. The Government are still saying more of the same. They do not say that simply in the House when we criticise their record; they say it up and down the country —to the despair of their audiences — to industry, businesses, commerce, education and the health service. The Government tell everyone that they will just repeat the mistakes of the past. They will not listen to any arguments to the effect that that is not the way to build for the future.
In the real world, it is part of the Government's job to help create the balance, foster stability and give confidence for the investment that our country so desperately needs. We face harsh and difficult choices. We need a Government who will tell the country the truth about the nature of those choices. The Opposition are telling the country where our choice lies. We will lift the ceiling on national insurance contributions. We will introduce a new top rate of tax of 50p in the pound — well above the level at which the present top rate applies. We will do that to fund increases for pensioners and increases in child benefit which are both desperately needed.

Dame Peggy Fenner: How far will that go?

Mrs. Beckett: I will tell the hon. Member for Medway (Dame P. Fenner) precisely how far it will go:£5 for every pensioner; £8 for every couple and £9·55 in child benefit for every child. All of that is desperately needed after 12 years of this Government.
Beyond that, we will not choose to waste billions of pounds trying to sustain an unsustainable, unworkable poll tax. We will use the resources from growth which gradually become available to invest in our future, and all the resources that become available will be invested in our future.
A few moments ago I quoted the Chief Secretary to the Treasury referring to the Government's record. He said then loud and clear what he has been saying ever since. This Government will use some of those resources for further cuts in income tax. They talk about prioritising, but they prioritise tax cuts over public spending. In the Daily Express of 26 April the Prime Minister said it again. He said:
Our primary objective is to reduce taxation at the lower end … we have an objective of moving to a 20p level of taxation.
We are making it plain that, although we do not believe that there should be an increase in the standard rate of tax, that rate cannot be cut while our need for public investment is large and growing. We want people to know that that is what we are saying so that they can choose.
The Government are saying something very different. Just as they did in 1988, the Government are giving the country not only the wrong signals but desperately, devastatingly misleading signals. In their desperate attempts to win the next election at any cost, the Government are telling the country that the sacrifice is almost over, that the problems are almost over, and that recovery is around the corner— and if not that corner, the one after, or perhaps, the one after that

Mr. Patrick Cormack: Will the hon. Lady give way?

Mrs. Beckett: I am sorry, but I do not have time.
The Government are trying to tell the country that it can have it all — that it can have investment in the future and income tax cuts as well and that there is no price to pay. That is an attractive message. We all like a bargain. It is another little miracle. The trouble is that those who are offering us that miracle have already sold us one. One in 12 home owners are two months or more behind with their mortgage payments — 790,000 mortgage payers are in arrears —almost 48,000 homes are repossessed, 900 companies a week are going bust, according to Dun and Bradstreet, and small businesses are bearing the brunt.
According to the Engineering Employers Federation, the recession is actually reducing the United Kingdom's manufacturing capacity. The Engineer tells us that, of the senior managers and engineers whom it surveyed, 90 per cent. believe that the recession is doing serious and lasting damage to our industrial base. Figures from KMPG Peat Marwick show that almost as many companies went into receivership in the first six months of this year as in the whole of last year. The construction analyst for Credit Lyonnais Laing said:
Conditions now are the worst I have seen in 29 years.
There was a price for that miracle. Without the windfall of North sea oil to cushion spending, there simply is not enough money to fund investment and to fund income tax cuts.
If they claim to be able to do both, the Government will have to cheat somewhere; they will have to squeeze somewhere; they will have to cut somewhere. The Institute

of Directors, in its recent report on continuing tax reform and continuing cuts in income and capital taxes, was honest enough to tell us its view of the ineviatable, inexorable consequences. In its judgment, the Government should cut capital taxes more and should cut income taxes more. The institute said that even if the Government increase VAT— and, after all, it is the policy that the Government are advocating— they will have to cut out— phase out— the state pension scheme, phase out the health service, phase out our education service and phase out unemployment benefits, and replace them in every case by private insurance. [Interruption.] It is no good the hon. Member for Beaconsfield (Mr. Smith) complaining. It is an Institute of Directors report. If he has not read it, I suggest that he do so. The institute says that it would be necessary to have a fallback scheme for the destitute. That is its word, not mine.
The Institute of Directors believes that that is the course which the Government should follow, and the tax changes that it advocates are the course which the Government are following, but the institute has the guts and the courage of its convictions to spell out what it means. The truth is that one cannot have it all. One either eats the seed corn or plants it.
The Government are offering us another miracle. By denying the nature of the choice facing the country, they are trying to offer us a reconditioned miracle— one with too many miles on the clock. It is time to invest in a new model instead— time for a new Government.

The Chief Secretary to the Treasure(Mr. David Mellor): I have drawn a number of conclusions from today's debate, the most prominent of which is that we all need a holiday. Among the other points that occur to me immediately is to say to the hon. Member for Liverpool, Walton (Mr. Kilfoyle) how glad we all were to hear his maiden speech and to wish him well in his time in the House. He replaces a very large figure — the late Eric Heffer, who was a well-known Member. I am sure that all hon. Members will join in wishing the hon. Member for Walton well in his work here.
I want to concentrate on three points. The first is our record, the second is our prospects, and the third is Labour's alternative ——

Mr. Paul Boateng: Don't spend too much time on the Government's record.

Mr. Mellor: The hon. Gentleman advises me not to spend too much time on our record. Indeed, it speaks for itself, so a few well-chosen words will deal with it. However, I shall be obliged to deal with Labour's alternative at rather greater length as we have not heard very much about it from the Labour party.
The motion is a travesty of the G7 statistics and record because, according to The Economist, between 1965 and 1980 the United Kingdom had the second lowest growth rate, not only among the G7 countries, but of any developed economy in the world. We were down there with Senegal and Benin— even Bangladesh grew more quickly. Those may not be the commanding heights of success in Labour's last two periods in office from which the Labour party should now criticise the temporary problems that we have been facing recently. Opposition Members know that in the 1970s we were bottom of the G7——

Mr. John Smith: Those countries had a faster rate of growth.

Mr. Mellor: No, not a faster rate of growth than us— [Interruption.] Oh, no, we have been through this before. Non-oil GDP growth from 1974 to — [HON. MEMBERS: "Oil."] We are always told that oil—[Interruption.] The right hon. and learned Member for Monklands, East (Mr. Smith) says, "Ugh!" He should speak to my right hon. and hon. Friends in the Department of Education and Science where that may be more readily understood as a form of sign language.
We are told that oil was a windfall benefit that the Government should not count. We had 1.2 per cent. growth in non-oil GDP between 1974 and 1979 compared with 1·9 per cent. growth between 1979 and 1990 — [Interruption.] The right hon. and learned Gentleman should look this up. He should not mutter and mumble.

Mrs. Beckett: As a matter of fact, I have looked it up because the right hon. and learned Gentleman used this statistic in our last debate on this matter. He will recall saying then that one must look at the precise period. He did not want to count the first two years of this Government because he said that it was all our fault. I have looked precisely at the figures for the period of office of the last Labour Government. The figures that the right hon. and learned Gentleman has quoted are the annual ones, whereas 1974 and 1979 were split years. If he looks at the figures precisely, he will see that from the first quarter of the Labour Government coming into power until their last quarter, and that from the first quarter of the Conservative Government coming to power to this quarter today, the figures are precisely the same.

Mr. Mellor: I find that extremely surprising. It sounds an unusually spurious statistic even by the standards of the Opposition, but it is on the record and we will have a look at it.
What is also on the record is that in the 1970s we were bottom of the G7 league for GDP growth. In the 1980s, we grew more quickly than Germany, France or Italy. That is not only the first decade since the first world war that we have grown more quickly than Germany and France; it is actually the first decade in which we have grown faster than Germany in peacetime ever.
We have been laying the ground for a continuing strong performance. In the 1970s, business investment in the United Kingdom was the second slowest growing in the G7. In the 1980s, it was the second fastest — behind only Japan. As the hon. Member for Derby, South (Mrs. Beckett) called those figures into question, may I advise her that the average annual growth in business investment in the period from 1974 to 1979 was 0·3 per cent., whereas in the period 1979 to 1990 it was 3·8 per cent.?

Mr. Graham Allen: Who wrote that?

Mr. Mellor: I am asked, "Who wrote it?" It was someone who knew some statistics that were accurate and tell a story of two different periods of government —[HON. MEMBERS: "You."] I was being too modest to refer to myself in that context, but if it is forced upon me, I will happily take responsibility for it. In the 1970s, we were at the bottom of the league for manufacturing productivity

growth; in the 1980s, we were at the top. So much for G7 comparisons relating to the lifetime of the present Government.
My right hon. Friend has already drawn attention to current prospects. Inflation has fallen by more than 5 per cent., to 5¾ per cent., and is set to fall still further in the coming months. Interest rates have fallen by four percentage points since we joined the exchange rate mechanism. Those achievements lay the foundations for the resumption of growth in the second half of this year.
This afternoon we heard criticisms of our inflation record, and the problems of unemployment were brought into that. How readily Opposition Members forget the painful lessons of office. Was it not the right hon. Member for Leeds, East (Mr. Healey) who said that inflation was the mother and father of unemployment? That is why the battle against inflation is one that we must win and cannot afford to lose.
Another encouraging sign is the growth in exports. In the second quarter of this year, export volumes rose by 3·5 per cent. to their highest ever level. We hear a good deal about manufacturing, and rightly so. Manufacturing exports rose by 4·5 per cent., while car exports rose by no less than 10 per cent. in that quarter alone, and have grown by a dramatic 45 per cent. in the last year.
The improvement in our trade balance and our current account is very clear. In the second quarter, the deficit was £0·9 billion; in the first quarter, it was £2·6 billion. Twelve months ago, it was £5·1 billion. Nothing could be clearer than that downward trend, which is based on a strong export performance.
Opposition Members suggest that there is nothing to look forward to. They have levelled the same wearisome charge throughout most of the past decade. It was good to hear the right hon. Member for Blaenau Gwent (Mr. Foot), but he reminded me of the last time that the country had recessionary problems. That was when he was Leader of the Opposition. Almost exactly 10 years go, on 27 July 1981, the right hon. Gentleman said—

Mr. Allen: He was not responsible for that.

Mr. Mellor: He is certainly responsible for the words that I am about to quote. The hon. Gentleman is frightfully uppity tonight. I do not know what has got into him: perhaps it is spring springing a bit late, or perhaps he is looking forward to playing with his bucket and spade. 
The right hon. Member for Blaenau Gwent said:
There will be no upturn without a U-turn, and a U-turn of gigantic proportions. Unless such a change of direction occurs we shall have the prospect of the 1980s differing from the 1930s in that there will be even larger numbers of people out of work, greater potential dangers of a resort to violence and a rate of inflation infinitely higher."—[Official Report, 27 July 1981; Vol. 9, c. 825.]
The right hon. Gentleman's observations presaged eight years of growth at more than 3 per cent. per annum. If there is one thing worse than being eternally into doom and gloom, it is being eternally into doom and gloom and eternally wrong about it.
Let us look at the record of the past 10 years. Living standards are a key indicator. Real take-home pay for those on average earnings will be more than 36 per cent. higher this year than it was in 1978–79. That represents a staggering success; it means another £70 a week, in real terms, for the average family. Under Labour, for nearly six years there was an increase of barely 1 per cent. That is the difference.
The improvement in living standards reflects several allied successes. The first is higher economic growth, with which we have already dealt; the second is the attraction of more investment. At constant prices, business investment was £55 billion in 1990, whereas it was only £37 billion in 1979. That is a massive quantum leap, predicated on the Government's success—notably in 1984—in changing the whole basis of business taxation. As a result of that, we have attracted increased investment not only from within the United Kingdom, but from overseas; we attract infinitely more inward investment from Japan and the United States than any other EC country. Inward investment in 1990–91 was at record levels, with more than 350 new projects. The Japanese Ministry of Finance has just disclosed that Japanese investment in Britain was up 30 per cent. in the year to March 1991, despite an overall fall in Japanese investment throughout the world. That is a sign that, whatever the lack of confidence in the Government on the Opposition Benches, there is no lack of confidence in the Government among the overseas investment community that is building further prosperity in this country.
The irony, which my right hon. Friend the Chancellor of the Exchequer pointed out, is this: if, indeed, in the past 12 years we have been confronted with such a legacy of failure, why has the Labour party stood its rhetoric on its head and repudiated so much of what it said about the economy in 1983? Now it fitfully and unconvincingly preaches what we practise. If all our policies have failed, why does the Labour party do that? It does not add up. Indeed, most of what the Labour party says about the economy does not add up.
The right hon. and learned Member for Monklands, East trailed his coat a bit by quoting two City analysts on whom he wished to rely for selective criticisms of the Government's policy. I should like to return to both companies to see whether the right hon. and learned Gentleman is quite so attentive to some of their other comments. The right hon. and learned Gentleman sighs heavily, rolls his eyes and looks at the ceiling. Perhaps he knows what is coming.
Phillips and Drew's analysis of the minimum wage—is the right hon. and learned Gentleman familiar with that? It—envisages 1·2 million jobs lost by year four with a fall in growth and an increase in inflation. Is the right hon. and learned Gentleman as attached to that prediction as he is to the one which is critical of us? Then there is Nomura. It states that Labour will be forced to raise interest rates by 2 per cent. to stave off devaluation.

Mr. John Smith: indicated dissent.

Mr. Mellor: The right hon. and learned Gentleman may shake his head and say that that will not happen, but he cannot say that that is not what Nomura says because it is what it says.
Nomura also predicts a fall in GDP, an increase in unemployment, and a substantial increase in inflation. Highly relevant to our debate is its comment:
Labour will have to either abandon fiscal prudence or adopt much more radical approaches to raising revenue.
Perhaps the right hon. and learned Gentleman, whose attachment to Nomura is so well established, will tell us

what radical approaches to raising revenue he has in mind. We certainly did not hear a lot about that this afternoon, but perhaps the time will come.
What we heard a lot of, however, was whingeing—the whingers of Walworth road were at it with a vengeance. There was not a word of recognition of the good indicators. Indeed, Labour has a simple philosophy: any good news is derided, any bad news is welcomed. I suspect that, when inflation is down to 4 per cent., Labour will complain that it is unfair to people on index-linked pensions.
One wonders why the Labour party does it. What is good for Britain is bad for Labour. That is the basic message, which is another way of saying that what is right for Labour is wrong for Britain. Accentuate the negative, eliminate the positive, so the song might go. I cannot help feeling that people find that unattractive and unconvincing.

Mr. Martin Flannery: This is poor stuff.

Mr. Mellor: If the best that the hon. Gentleman can do is to say that this is poor stuff, as he undoubtedly said to all his pupils in years gone by, he must find a better answer.
It may be regrettable when that attitude is adopted merely by Labour spokesmen in criticism, but it becomes reprehensible when, in their enthusiasm to talk Britain down, they distort what others have to say.
I wonder who has been looking at the correspondence columns of the Financial Times of today. A letter from Mr. John Banham, director general of the CBI, says:
Roy Hattersley incorrectly attributes to me…the statement that Britain is not suffering from a recession but from 'a slump'. I said no such thing.…The key to getting things turned around is a restoration of business and consumer confidence…Confidence is fragile enough without Roy Hattersley putting words into my mouth.

Mr. Rhodri Morgan: Will the Minister give way?

Mr. Mellor: If the hon. Member for Cardiff, West (Mr. Morgan) agrees not to shout at me from a sedentary position for the rest of my speech, I shall give way. Do I have a deal?—[Interruption.]While the hon. Gentleman is thinking about it, I shall go on. Will the hon. Gentleman continue to shout at me, or will he have his say and shut up? I do not think that I have the undertaking that I sought.

Mr. Speaker: Order. May I adjudicate on the deals?

Mr. Morgan: Will the Minister confirm that, in the paragraph that he left out, which came immediately after the bit that he put in, Mr. Banham went on to illustrate that when Mr. Redhead suggested to him that Britain was in a slump and not a recession, he did not dissent from that proposition?

Mr. Mellor: The hon. Gentleman can read the letter. I shall hand it over to him. Mr. Banham said no such thing and the only referece to a slump was in Brian Redhead's question. The whole point of the letter, which the hon. Gentleman seems to have missed because he was too busy muttering imprecations, is that Mr. Banham was saying categorically on the record in the Financial Times that he did not like people saying that he had said that Britain was


in a slump when he had not. He said that that was talking Britain down and destroying fragile confidence, and that the Labour party should not do it.
If the advice of Mr. Banham is of interest to the Labour party, I should like to quote some more of his advice. Just last month, Mr. Banham announced that he would be extending his period of office until after the next election. He said that it would be useful for the CBI to be able to defer its final choice until the outcome of the election was known. If hon. Members want to know why he said that, he is quoted in The Times as saying:
I think if there is a Conservative government what you need is a problem solver because under the Conservatives— [Interruption.]—wait for it; be careful—
'there is a ready market for contributing ideas, and no market for generalised whingeing on request. Under a Labour government I think you want someone who can explain, to politicians in particular, why the theories simply are not going to work in practice in the world of business.' Under past Labour governments the director general's main task was one of damage limitation, he said: `That requires a very different kind of person.'
It is interesting that, when Labour talks down what is happening in this country, it is not confidence that is talking but fear. Labour Members are afraid that the election victory that they have been dreaming of will be snatched away by a recovery. They are afraid that our policies are working and that their alternatives merely repeat the mistakes of the past and are better not dwelt on in detail.
Let us consider the nonsense of yesterday's press conference on the citizens charter. The Leader of the Opposition says that the citizens charter does not matter tuppence, but he turned up with seven members of the shadow Cabinet to prove it. If it is such rubbish, why does he need to turn up with more heavies than Madonna? Surely he is up to doing the job himself. What was the point of the less-than-magnificent seven, or the seven dwarfs, according to one's point of view? The Times may have been right when it said:
with the heavyweight line up suggesting anxiety among the leadership that the Prime Minister may have discovered a vote winner.
Why is Labour so afraid of getting value for money from the public services? I suspect that it is because the public sector unions do not like it.
The right hon. and learned Member for Monklands, East treated us to a peroration of stunning and bare-faced imprecision. I have great regard for the right hon. and learned Gentleman, and I know that he is quite capable of being extremely precise. One must assume that his total refusal to descend to the particulars of Labour policy was by design and not by accident. At some point, we will all need to be given the details and I suspect that Labour will not get through an election campaign without the details being revealed.
Let us examine the detail of the minimum wage policy. The right hon. and learned Member for Monklands, East launched into a virulent defence of that policy, but methinks he doth protest too much at several material parts of that policy. He spoke about critical letters that were received by the Chancellor and about some of the replies, and he satirised the Chancellor's polite introduction when my right hon. Friend said that he valued the advice of business men.
How much does the right hon. and learned Gentleman value the advice of some of his brothers and comrades

about the minimum wage? How much does he value the advice of Mr. Gavin Laird of the Amalgamated Engineering Union who said:
It's never worked in the past, there's no logic for it. It doesn't work in any other country and it certainly will not work in Great Britain.
How much does the right hon. and learned Gentleman value the advice of Mr. Joe Haines, hardly a Conservative, who said:
The minimum wage proposals won't work, and if they do they won't help.
How much does he value the advice of his hon. Friend the Member for Birkenhead (Mr. Field), who a year or two ago wrote:
The employment consequences…will be little short of disastrous.
Does he respect the views of the Sunday People, which is hardly a Conservative newspaper? It stated:
Labour's plan for a national minimum wage is not the answer. It would only cause more unemployment and deny jobs to those who need them.

Mr. Haynes: The right hon. and learned Gentleman promised that he would give way and I am grateful to him for doing so. There are certainly some bright sparks in the Treasury. First, it was said that a minimum wage would result in 1·2 million people becoming unemployed. The Secretary of State and the Prime Minister spoke about 2 million. They cannot even get the figures right. What will be the true figure? People out there are waiting for a minimum wage and after the next election they will get it.

Mr. Mellor: The hon. Gentleman will be greatly missed in the next Parliament. The figure of 1·2 million was the estimate of our friends at Phillips and Drew, not ours.
The right hon. Member for Leeds, East once said, "When you are in a hole, you should stop digging." The right hon. and learned Member for Monklands, East was digging like mad on the minimum wage and was digging away last week in an interview with the Morning Star when he said:
We will listen to employers—
the next bit is worth noting—
but I can assure you we have no intention of phasing in reform over stages.
Does that mean straight to 66 per cent. at a stroke? Is the right hon. and learned Gentleman embarrassed by the fact that the only newspaper giving editorial support to the minimum wage policy is the Morning Star? I thought that Labour had lived through that phase.
The right hon. and learned Gentleman may be digging away, but the Leader of the Opposition is having second thoughts. The Daily Maillast week, apropos his speech to the Transport and General Workers Union a week or so ago, said:
His staff had gone out of their way to insist that Mr. Kinnock would take the issue head-on at Blackpool by claiming he would be 'proud' to fight the General Election on the issue …Until Tuesday night, Mr. Kinnock seemed to have been convinced that it was a winner for Labour. But whatever was in his first draft it appears to have been deliberately dropped.
What a muddle; what a mess. It is a muddle and a mess because the only consequence of the minimum wage is a loss of jobs. The Labour party should have more noble ambitions than pulling people down by their boot straps.
On interest rates, all we had today was the usual repetition of "Monklands law"—1 per cent. reduction and nothing else. Credit controls did not make their usual appearance, but during a party political broadcast the


right hon. and learned Member for Monklands, East recently reiterated his conviction that they are right. He has yet to tell us how he would prevent people going overseas to borrow money and why it is fair that credit controls should bear down on the poorer section of the community who cannot buzz off to France, Germany or Switzerland to borrow the money.
The right hon. and learned Gentleman has also failed to tell us how he would justify credit controls in the personal sector when 85 per cent. of personal borrowing is on mortgages. That is an issue which once again will not go away. I can do no better than repeat what the right hon. Member for Llanelli (Mr. Davies) said about credit controls:
The Labour party idea that you can have credit controls is rubbish. There is no way you can control credit except by controlling the price of credit and the price of credit is the bank rate.
Apart from saying that the Government's costings are silly, the Labour party has produced no answer to our carefully costed publication on Labour's programme showing that £35 billion would be the full year cost.

Mr. John Evans: Rubbish.

Mr. Mellor: Saying, "Rubbish," s not an argument and an argument will have to be provided. One can assume that the only reason that the Labour party has failed to answer the charge is that it is thinking up new ones to levy. There has been no satisfactory answer. It is not only Conservative Members who are getting on to that point. What about Professor Rowthorn, not a well-known Conservative, who when asked—[HON. MEMBERS: "Never heard of him."] Well, hon. Members are about to. When asked on "Panorama" whether he thought Labour's spending plans added up, he said:
Frankly, I think they don't add up. If you take their whole list of spending plans and you say where's the money for this list going to come from, I think the answer is I have no idea.
It is Dolly Parton economics—an incredible figure that would collapse without hidden support. It is about time that the hidden support ceased to be hidden. If only £4 billion has been costed, with the pain that has already had to be expressed about the tax consequences of raising that, where will the £30 billion come from? Every adjective in the book has been used—top, first, central, key—to establish these priorities. Those are plainly words of commitment, and everything cannot be a priority; that all have won and all must have prizes, showing that Lewis Carroll is alive and well and writing speeches for the Leader of the Opposition.
There is brazenness in the fact that, since we published our analysis, fresh policy documents about which further details will be supplied on another occasion have been issued, making clear further commitments. The hon. Member for Livingston (Mr. Cook) went to Oldham where he may have assumed the record would not reach, but the Oldham Evening Chronicle has been passed to me showing that, with a recklessness that came from being away from London, he said:
A Labour Government would pour money into the NHS.
That would be interesting.
Even in the presence of the hon. Lady who formulated "Beckett's law" herself, the hon. Member for Kingston upon Hull, East (Mr. Prescott) pledged more spending. The Derby Evening Telegraph, in an article headed
Shadow Minister's pledge on railways",
said:
Shadow Transport Secretary John Prescott has pledged to electrify the Midlands main line if a Labour Government wins the next general election.
Did the hon. Lady leap to the rostrum and say, "The man's mad. He should be certified. I am not going to do it. Beckett's law says that we have only two priorities." Of course she did not. She sat there and smiled, knowing that it was not right.
The Labour party's economic policy reminds me of the last will and testament of Rabelais, who said:
I owe much. I have nothing. The rest I leave to the poor.

Mr. Derek Foster: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 199, Noes 311.

Division No. 225]
[10 pm


AYES


Abbott, Ms Diane
Cummings, John


Adams, Mrs Irene (Paisley, N.)
Cunliffe, Lawrence


Allen, Graham
Cunningham, Dr John


Anderson, Donald
Darling, Alistair


Archer, Rt Hon Peter
Davies, Rt Hon Denzil (Llanelli)


Armstrong, Hilary
Davies, Ron (Caerphilly)


Ashdown, Rt Hon Paddy
Davis, Terry (B'ham Hodge H'l)


Ashley, Rt Hon Jack
Dewar, Donald


Banks, Tony (Newham NW)
Dixon, Don


Barnes, Harry (Derbyshire NE)
Dobson, Frank


Barnes, Mrs Rosie (Greenwich)
Duffy, Sir A. E. P.


Barron, Kevin
Dunnachie, Jimmy


Battle, John
Eadie, Alexander


Beckett, Margaret
Edwards, Huw


Beith, A. J.
Evans, John (St Helens N)


Bell, Stuart
Ewing, Harry (Falkirk E)


Bellotti, David
Ewing, Mrs Margaret (Moray)


Bennett, A. F. (D'nt'n &amp; R'dish)
Fatchett, Derek


Benton, Joseph
Fearn, Ronald


Bermingham, Gerald
Field, Frank (Birkenhead)


Bidwell, Sydney
Fisher, Mark


Blair, Tony
Flannery, Martin


Boateng, Paul
Flynn, Paul


Boyes, Roland
Foot, Rt Hon Michael


Bradley, Keith
Foster, Derek


Brown, Gordon (D'mline E)
Foulkes, George


Brown, Nicholas (Newcastle E)
Fraser, John


Brown, Ron (Edinburgh Leith)
Galloway, George


Bruce, Malcolm (Gordon)
Garrett, Ted (Wallsend)


Caborn, Richard
George, Bruce


Callaghan, Jim
Gilbert, Rt Hon Dr John


Campbell, Menzies (Fife NE)
Godman, Dr Norman A.


Campbell, Ron (Blyth Valley)
Golding, Mrs Llin


Campbell-Savours, D. N.
Gordon, Mildred


Canavan, Dennis
Gould, Bryan


Carr, Michael
Grant, Bernie (Tottenham)


Cartwright, John
Griffiths, Nigel (Edinburgh S)


Clark, Dr David (S Shields)
Griffiths, Win (Bridgend)


Clarke, Tom (Monklands W)
Grocott, Bruce


Clwyd, Mrs Ann
Hain, Peter


Cook, Frank (Stockton N)
Hardy, Peter


Cook, Robin (Livingston)
Harman, Ms Harriet


Corbett, Robin
Haynes, Frank


Corbyn, Jeremy
Heal, Mrs Sylvia


Cousins, Jim
Healey, Rt Hon Denis


Cox, Tom
Hinchliffe, David


Crowther, Stan
Hoey, Ms Kate (Vauxhall)


Cryer, Bob
Hogg, N. (C'nauld &amp; Kilsyth)






Home Robertson, John
Orme, Rt Hon Stanley


Hood, Jimmy
Owen, Rt Hon Dr David


Howarth, George (Knowsley N)
Parry, Robert


Howell, Rt Hon D. (S'heath)
Patchett, Terry


Howells, Dr. Kim (Pontypridd)
Pendry, Tom


Hoyle, Doug
Pike, Peter L.


Hughes, John (Coventry NE)
Powell, Ray (Ogmore)


Hughes, Robert (Aberdeen N)
Prescott, John


Hughes, Roy (Newport E)
Quin, Ms Joyce


Hughes, Simon (Southwark)
Radice, Giles


Illsley, Eric
Randall, Stuart


Jones, Barry (Alyn &amp; Deeside)
Redmond, Martin


Jones, Martyn (Clwyd S W)
Rees, Rt Hon Merlyn


Kennedy, Charles
Richardson, Jo


Kilfoyle, Peter
Robertson, George


Lamond, James
Robinson, Geoffrey


Leadbitter, Ted
Rogers, Allan


Leighton, Ron
Rooker, Jeff


Lestor, Joan (Eccles)
Ross, Ernie (Dundee W)


Lewis, Terry
Sedgemore, Brian


Litherland, Robert
Sheldon, Rt Hon Robert


Livingstone, Ken
Shore, Rt Hon Peter


Lloyd, Tony (Stretford)
Sillars, Jim


Lofthouse, Geoffrey
Skinner, Dennis


Loyden, Eddie
Smith, Andrew (Oxford E)


McAllion, John
Smith, Rt Hon J. (Monk'ds E)


Macdonald, Calum A.
Soley, Clive


McFall, John
Spearing, Nigel


McKay, Allen (Barnsley West)
Steinberg, Gerry


McKelvey, William
Stott, Roger


McLeish, Henry
Strang, Gavin


Maclennan, Robert
Straw, Jack


McMaster, Gordon
Taylor, Matthew (Truro)


McNamara, Kevin
Turner, Dennis


McWilliam, John
Vaz, Keith


Madden, Max
Walley, Joan


Marek, Dr John
Wardell, Gareth (Gower)


Marshall, David (Shettleston)
Wareing, Robert N.


Martin, Michael J. (Springburn)
Watson, Mike (Glasgow, C)


Martlew, Eric
Welsh, Andrew (Angus E)


Meacher, Michael
Welsh, Michael (Doncaster N)


Meale, Alan
Williams, Rt Hon Alan


Michael, Alun
Williams, Alan W. (Carm'then)


Michie, Bill (Sheffield Heeley)
Wilson, Brian


Morgan, Rhodri
Winnick, David


Morley, Elliot
Wise, Mrs Audrey


Morris, Rt Hon A. (W'shawe)
Worthington, Tony


Morris, Rt Hon J. (Aberavon)
Wray, Jimmy


Mowlam, Marjorie
Young, David (Bolton SE)


Mullin, Chris



Murphy, Paul
Tellers for the Ayes:


Nellist, Dave
Mr. Ken Eastham and Mr. Thomas McAvoy.


Oakes, Rt Hon Gordon



O'Brien, William





NOES


Adley, Robert
Blackburn, Dr John G.


Alexander, Richard
Blaker, Rt Hon Sir Peter


Alison, Rt Hon Michael
Body, Sir Richard


Amery, Rt Hon Julian
Bonsor, Sir Nicholas


Amess, David
Boscawen, Hon Robert


Amos, Alan
Boswell, Tim


Arbuthnot, James
Bottomley, Mrs Virginia


Arnold, Jacques (Gravesham)
Bowden, A. (Brighton K'pto'n)


Arnold, Sir Thomas
Bowden, Gerald (Dulwich)


Ashby, David
Bowis, John


Aspinwall, Jack
Boyson, Rt Hon Dr Sir Rhodes


Atkins, Robert
Braine, Rt Hon Sir Bernard


Atkinson, David
Brandon-Bravo, Martin


Baker, Rt Hon K. (Mole Valley)
Brazier, Julian


Baker, Nicholas (Dorset N)
Bright, Graham


Baldry, Tony
Brown, Michael (Brigg &amp; Cl't's)


Banks, Robert (Harrogate)
Browne, John (Winchester)


Beaumont-Dark, Anthony
Burns, Simon


Bellingham, Henry
Burt, Alistair


Bendall, Vivian
Butcher, John


Bennett, Nicholas (Pembroke)
Butler, Chris


Benyon, W.
Butterfill, John


Bevan, David Gilroy
Carlisle, John, (Luton N)


Biffen, Rt Hon John
Carlisle, Kenneth (Lincoln)





Carrington, Matthew
Heathcoat-Amory, David


Carttiss, Michael
Hicks, Mrs Maureen (Wolv' NE)


Cash, William
Higgins, Rt Hon Terence L.


Chalker, Rt Hon Mrs Lynda
Hill, James


Channon, Rt Hon Paul
Hind, Kenneth


Chapman, Sydney
Holt, Richard


Chope, Christopher
Hordern, Sir Peter


Churchill, Mr
Howard, Rt Hon Michael


Clark, Rt Hon Alan (Plymouth)
Howarth, G. (Cannock &amp; B'wd)


Clark, Dr Michael (Rochford)
Howe, Rt Hon Sir Geoffrey


Clark, Rt Hon Sir William
Howell, Rt Hon David (G'dford)


Clarke, Rt Hon K. (Rushcliffe)
Howell, Ralph (North Norfolk)


Colvin, Michael
Hughes, Robert G. (Harrow W)


Conway, Derek
Hunt, Rt Hon David


Coombs, Anthony (Wyre F'rest)
Hunt, Sir John (Ravensbourne)


Coombs, Simon (Swindon)
Hurd, Rt Hon Douglas


Cormack, Patrick
Irvine, Michael


Cran, James
Irving, Sir Charles


Currie, Mrs Edwina
Jack, Michael


Curry, David
Jackson, Robert


Davies, Q. (Stamf'd &amp; Spald'g)
Janman, Tim


Davis, David (Boothferry)
Jessel, Toby


Day, Stephen
Johnson Smith, Sir Geoffrey


Dickens, Geoffrey
Jones, Gwilym (Cardiff N)


Dicks, Terry
Jones, Robert B (Herts W)


Dorrell, Stephen
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Key, Robert


Dover, Den
Kilfedder, James


Dykes, Hugh
King, Roger (B'ham N'thfield)


Eggar, Tim
King, Rt Hon Tom (Bridgwater)


Emery, Sir Peter
Kirkhope, Timothy


Evans, David (Welwyn Hatf'd)
Knapman, Roger


Evennett, David
Knight, Greg (Derby North)


Fairbairn, Sir Nicholas
Knight, Dame Jill (Edgbaston)


Fallon, Michael
Knowles, Michael


Farr, Sir John
Knox, David


Favell, Tony
Lamont, Rt Hon Norman


Fenner, Dame Peggy
Latham, Michael


Field, Barry (Isle of Wight)
Lawrence, Ivan


Finsberg, Sir Geoffrey
Lee, John (Pendle)


Fishburn, John Dudley
Leigh, Edward (Gainsbor'gh)


Fookes, Dame Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lester, Jim (Broxtowe)


Forsyth, Michael (Stirling)
Lilley, Rt Hon Peter


Forth, Eric
Lloyd, Sir Ian (Havant)


Fowler, Rt Hon Sir Norman
Lloyd, Peter (Fareham)


Fox, Sir Marcus
Lord, Michael


Franks, Cecil
Luce, Rt Hon Sir Richard


Freeman, Roger
Lyell, Rt Hon Sir Nicholas


French, Douglas
McCrindle, Sir Robert


Gale, Roger
MacGregor, Rt Hon John


Gardiner, Sir George
MacKay, Andrew (E Berkshire)


Garel-Jones, Tristan
Maclean, David


Gill, Christopher
McLoughlin, Patrick


Gilmour, Rt Hon Sir Ian
McNair-Wilson, Sir Michael


Glyn, Dr Sir Alan
McNair-Wilson, Sir Patrick


Goodhart, Sir Philip
Madel, David


Goodlad, Alastair
Major, Rt Hon John


Goodson-Wickes, Dr Charles
Mans, Keith


Gorman, Mrs Teresa
Maples, John


Gorst, John
Marland, Paul


Grant, Sir Anthony (CambsSW)
Marlow, Tony


Greenway, Harry (Ealing N)
Marshall, John (Hendon S)


Greenway, John (Ryedale)
Marshall, Sir Michael (Arundel)


Gregory, Conal
Martin, David (Portsmouth S)


Griffiths, Peter (Portsmouth N)
Mates, Michael


Grist, Ian
Maude, Hon Francis


Ground, Patrick
Mawhinney, Dr Brian


Grylls, Michael
Maxwell-Hyslop, Robin


Hague, William
Mellor, Rt Hon David


Hamilton, Neil (Tatton)
Meyer, Sir Anthony


Hampson, Dr Keith
Miller, Sir Hal


Hannam, John
Miscampbell, Norman


Hargreaves, A. (B'ham H'll Gr')
Mitchell, Andrew (Gedling)


Hargreaves, Ken (Hyndburn)
Moate, Roger


Harris, David
Monro, Sir Hector


Haselhurst, Alan
Montgomery, Sir Fergus


Hayes, Jerry
Moore, Rt Hon John


Hayhoe, Rt Hon Sir Barney
Morris, M (N'hampton S)


Hayward, Robert
Morrison, Sir Charles






Moss, Malcolm
Shaw, David (Dover)


Moynihan, Hon Colin
Shaw, Sir Giles (Pudsey)


Mudd, David
Shaw, Sir Michael (Scarb')


Neale, Sir Gerrard
Shelton, Sir William


Needham, Richard
Shephard, Mrs G. (Norfolk SW)


Nelson, Anthony
Shepherd, Colin (Hereford)


Neubert, Sir Michael
Shepherd, Richard (Aldridge)


Newton, Rt Hon Tony
Shersby, Michael


Nicholls, Patrick
Sims, Roger


Nicholson, David (Taunton)
Skeet, Sir Trevor


Nicholson, Emma (Devon West)
Smith, Tim (Beaconsfield)


Norris, Steve
Soames, Hon Nicholas


Onslow, Rt Hon Cranley
Speller, Tony


Oppenheim, Phillip
Spicer, Sir Jim (Dorset W)


Page, Richard
Spicer, Michael (S Worcs)


Paice, James
Squire, Robin


Patnick, Irvine
Stanbrook, Ivor


Patten, Rt Hon Chris (Bath)
Stanley, Rt Hon Sir John


Patten, Rt Hon John
Steen, Anthony


Pattie, Rt Hon Sir Geoffrey
Stevens, Lewis


Pawsey, James
Stewart, Allan (Eastwood)


Peacock, Mrs Elizabeth
Stewart, Andy (Sherwood)


Porter, Barry (Wirral S)
Stewart, Rt Hon Sir Ian


Porter, David (Waveney)
Sumberg, David


Portillo, Michael
Summerson, Hugo


Powell, William (Corby)
Tapsell, Sir Peter


Price, Sir David
Taylor, Ian (Esher)


Raison, Rt Hon Sir Timothy
Taylor, Sir Teddy


Rathbone, Tim
Tebbit, Rt Hon Norman


Redwood, John
Temple-Morris, Peter


Rhodes James, Sir Robert
Thompson, D. (Calder Valley)


Ridsdale, Sir Julian
Thompson, Patrick (Norwich N)


Rifkind, Rt Hon Malcolm
Thorne, Neil


Roberts, Rt Hon Sir Wyn
Thurnham, Peter


Roe, Mrs Marion
Townend, John (Bridlington)


Rossi, Sir Hugh
Townsend, Cyril D. (B'heath)


Rost, Peter
Tracey, Richard


Rowe, Andrew
Tredinnick, David


Rumbold, Rt Hon Mrs Angela
Trippier, David


Ryder, Rt Hon Richard
Twinn, Dr Ian


Sackville, Hon Tom
Viggers, Peter


Sainsbury, Hon Tim
Wakeham, Rt Hon John


Sayeed, Jonathan
Wardle, Charles (Bexhill)


Scott, Rt Hon Nicholas
Warren, Kenneth





Watts, John
Wolfson, Mark


Wells, Bowen
Wood, Timothy


Wheeler, Sir John
Woodcock, Dr. Mike


Whitney, Ray
Yeo, Tim


Widdecombe, Ann
Young, Sir George (Acton)


Wiggin, Jerry



Wilkinson, John
Tellers for the Noes:


Wilshire, David
Mr. David Lightbown and Mr. John M. Taylor.


Winterton, Mrs Ann



Winterton, Nicholas

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates Her Majesty's Government on its pursuit of sound economic policies; notes that those policies have led to a large fall in inflation; notes also that as inflationary pressures have eased, interest rates have been cut substantially, while the £ sterling has maintained its position in the ERM; and calls on the Government to continue with its prudent policies, which will lead to a resumption of sustained growth.

Mr. Derek Conway: On a point of order, Mr. Speaker. I wonder if you can help me. This is a difficult time of year and many colleagues are thinking of the days ahead. We are usually well served by people in the House, but I wonder if you can ensure that we had the full time for that Division, because the numbers voting against the Government were so derisory. Could it have been that the doors were locked too early so that Labour Members could not vote, or could it be that they did not turn up to support their own motion?

Mr. Speaker: That is not a point of order for me. I have received no report on that matter.

DANGEROUS DOGS BILL (ALLOCATION OF TIME)

Ordered,
That the Order of the House [10th June] be supplemented as follows:—

Lords Amendments

1. The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and, if not previously brought to a conclusion, shall be brought to a conclusion two hours after the commencement of the proceedings on this Order.

2.—(1) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1 above—

(a) Mr. Speaker shall first put forthwith any Quesiton which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any further Amendment of the said Lords Amendment moved by a Minister of the Crown and on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in the said Lords Amendment, or, as the case may be, in the said Lords Amendment as amended;
(b) Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or, as the case may be, in their Amendment as amended;
(ii) put forthwith the Question on any Motion moved by a Minister of the Crown, That this House doth disagree with the Lords in a Lords Amendment;
(iii) put forthwith with respect to the Amendments designated by Mr. Speaker which have not been disposed of the Question, That this House doth agree with the Lords in the said Amendments; and
(iv) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments;
(c) as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment.

Stages subsequent to first Consideration of Lords Amendments

3. Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of any further Message from the Lords on the Bill.

4. The proceedings on any further Message from the Lords shall, if not previously brought to a conclusion, be brought to a conclusion one hour after the commencement of those proceedings.

5. For the purpose of bringing those proceedings to a conclusion—

(a) Mr. Speaker shall put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair;
(b) Mr. Speaker shall then designate such of the remaining items in the Lords Message as appear to him to involve questions of Privilege and shall—

(i) put forthwith the Question on any Motion made by a Minister of the Crown on any item:
(ii) in the case of each remaining item designated by Mr. Speaker, put forthwith the Question, That this House doth agree with the Lords in their Proposal; and
(iii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

Supplemental

6.—(1) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment and quorum of a Committee to draw up Reasons.

(2) Such a Committee shall report before the conclusion of the sitting at which it is appointed.

7.—(1) In this paragraph "the proceedings" means proceedings on Consideration of Lords Amendments or on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reaons and the Report of such as Committee.

(2) Paragraph (1) of Standing Order No. 14 (Exempted business) shall apply to the proceedings.

(3) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a Minister of the Crown, and the Question on any such Motion shall be put forthwith.

(4) If the proceedings are interrupted by a Motion for the Adjournment of the House under Standing Order No. 20 (Adjournment on specific and important matter that should have urgent consideration) a period equal to the duration of the proceedings on the Motion shall be added to the period at the end of which the proceedings are to be brought to a conclusion.—[Mrs. Rumbold]

Orders of the Day — Dangerous Dogs Bill

Lords amendments considered.

Lords amendments Nos. 1 and 2 agreed to.

Clause 1

DOGS BRED FOR FIGHTING

Lords amendment: No. 3, in page 2, line 9, leave out ("destroy them, or").

Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mrs. Rumbold.]

Mr. Robin Corbett: I want to thank the other place and the Government for their role in accepting this amendment. I do not want to delay the House, but this is a serious point. The tragedy is that, because of the way in which earlier proceedings were guillotined, we were not able to discuss this. It would have been wrong for some people who have to have their dogs put down to be able to obtain compansation. There is no doubt that some of them would have been tempted to get hold of the nearest bit of scaffolding and bang the dog over the head. They would then be entitled to compensation. At least the amendment stops that happening and ensures that dogs have to be put down humanely by veterinary surgeons or others so qualified. We are glad to support the amendment.

The Minister of State, Home Office (Mrs. Angela Rumbold): I am glad that the hon. Member for Birmingham, Erdington (Mr. Corbett) made that point. This is a good idea and we are happy to accept it simply because we would not wish an owner to destroy a dog by inhumane means and then be able to claim compensation and the cost of the dog's destruction. It would not have been practical to determine in every case whether an owner had destroyed his dog humanely. It seems right that only owners who arrange for a veterinary surgeon or other responsible organisation to put an animal down should be able to claim compensation.

Question put and agreed to.—[Special Entry.]

Subsequent Lords amendments agreed to.

Clause 8

SHORT TITLE, INTERPRETATION, COMMENCEMENT AND EXTENT

Lords amendment: No. 24, in page 6, line 31, at end insert
("and includes the common parts of a building containing two or more separate dwellings.")

Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mrs. Rumbold.]

Mr. Corbett: The Minister will remember that in our earlier debate on this part of the Bill some of us mentioned the problem that exists in tower blocks in big cities involving people who keep menacing dogs. Sometimes those dogs are used for menacing and threatening

purposes. I know of cases in my constituency where, regrettably, people with such dogs are thoroughly bad neighbours in that they might make a lot of late-night noise, not necessarily because of parties. It seems that they have different sleeping habits from the rest of the population. Whereas it is usually possible to knock on a neighbour's door to ask if he would mind turning down the noise because one has to get a bus to work at 7.30 am—or words to that effect, depending on one's temper and on the time of night—that approach becomes absolutely impossible. One knows that the door will be opened by a dreadful monster with an even worse monster on four feet with him, panting. That is wholly unfair.
There are two types of dog. The first lives in the flats and can be used in a menacing manner or is itself a menace on the immediate landings of the block of flats. The second type is the dog that is used to using the public places—public in the sense that they are used by the residents of the flats. That is the point, because those places are not public in the sense that all members of the public are entitled to have access to them. I am glad that the city of Birmingham—and, I believe, other cities—are getting support from tenants to introduce concierge schemes, which are very well thought out. They involve some extra rent but trained security people are on duty. An analysis has been carried out of the hours when vandals are most active and the level of staffing is geared to deal with that. The public cannot merely enter those blocks of flats. Great efforts are being made in more and more blocks to keep some people out.
I should like the Minister to assure us that that issue is covered and that the instances where the dog either gets in or is perhaps brought in by a visitor, with the same results, will also be covered. I am sure that other hon. Members have had a similar experience. It is a real problem for many people living on top of one another in such conditions.

Mr. Michael J. Martin: I have no wish to detain the House, but there must be more multi-storey flats in my constituency than in any other constituency in the United Kingdom. I have seen some beautiful multi-storey flats destroyed because thoughtless neighbours let dogs foul the lifts, and people are frightened to use them. I described in our earlier debates how some stupid neighbours call the lift, put the dog in and hope that someone takes the dog out on the ground floor. That makes me think that some dogs must be cleverer than their owners. I have seen the environment of a lot of multi-storey flats destroyed because people keep large dogs there. So I hope that the Minister can assure me that the provision will cover Scotland, too.

Mrs. Rumbold: The legislation was sparked off partly by the debate in the House in which the hon. Member for Glasgow, Springburn (Mr. Martin) took part. Indeed, now people who allow their dogs, even dogs bred for fighting, to roam throughout the night the corridors of blocks of flats which have entryphones, will be caught by the amendment, and will be responsible for those criminal actions, as will the dog owners referred to by the hon. Gentleman, who visit blocks of flats which, although enlosed, are opened by entryphone or other form of access. I hope that, with those assurances, the House will accept the amendment.

Mr. Robert Maclennan: I am sorry that I did not catch your eye, Mr. Speaker, before


the Minister rose. Will the Minister be kind enough to tell us whether the wording was devised by her Department?
The concept of a public place
where it is not permitted to be
seems to raise as many questions as it answers. "Permitted" by whom? When cases come to court, will the wording be sufficiently precise to meet the point that the whole House is trying to meet? I know that it is a late stage in the passage of the Bill to deal with that important issue. As the hon. Member for Glasgow, Springburn (Mr. Martin) rightly said, the word "permitted" suggests a byelaw or other rubric operating in the area. I am far from satisfied that we have got the drafting right.

Mrs. Rumbold: I think that I can offer the hon. Gentleman the assurance that he wants. As I said earlier, the amendment was introduced at the Committee stage and was examined thereafter both by our advisers and by the House of Lords. Without the amendment, the criminal offences in the Bill which apply in public places could not apply in the communal areas of blocks of flats. For that reason, because there was a lacuna in the drafting, it was important to make it clear that such areas are public places where people sometimes let dogs roam. If there were nothing in the legislation to catch such people the measure would not be effective. The amendment is an extension of the definition of a public place.

Question put and agreed to.

Remaining Lords amendments agreed to.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.),

BUILDING SOCIETIES

That the draft Building Societies Act 1986 (Modifications) Order 1991, which was laid before this House on 1st July, be approved.—[Mr. Sackville.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.),

SOCIAL SECURITY

That the draft Social Security (Severe Disablement Allowance) Amendment Regulations 1991, which were laid before this House on 4th July, be approved.—[Mr. Sackville.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.),

SOCIAL SECURITY

That the draft Disability Living Allowance Advisory Board Regulations 1991, which were laid before this House on 11th July, be approvecl.—[Mr. Sackville]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.),

PUBLIC HEALTH

That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 4) Order 1991 (S.I., 1991, No. 1533), dated 5th July 1991, a copy of which was laid before this House on 8th July, be approved.—[Mr. Sackville.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.),

PUBLIC HEALTH

That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 5) Order 1991 (S.I., 1991, No. 1608), dated 12th July 1991, a copy of which was laid before this House on 15th July, be approved.—[Mr. Sackville.]

Question agreed to.

Orders of the Day — European Community Documents

MEDICINAL PRODUCTS (LEGAL PROTECTION)

Motion made, and Question proposed,
That this House takes note of European Community Document No. 6033/090 and the supplementary explanatory memorandum submitted by the Department of Trade and Industry on 5th June 1991, relating to supplementary protection certificates for medicinal products; and supports the Government's intention to ensure that a proper balance is achieved between the various interests involved before any agreement is reached, but considers that the European Commission's proposal is a good basis for achieving this.—[Mr. Sackville.]

Dr. Norman A. Godman: On a point of order, Mr. Deputy Speaker. I promise not to detain the House for more than a few seconds, but I am a little concerned about the contents of the motion.
On 17 June, the hon. Member for Caernarfon (Mr. Wigley) and I complained about the way in which Hansard had reported the motion passed by European Standing Committee B in respect of the European Community document in question.
I seek your advice, Mr. Deputy Speaker, because the present motion does not reflect accurately the motion that was passed by European Standing Committee B on 12 June. In that respect, I believe that it is inaccurate and —at least until I hear your advice, Mr. Deputy Speaker —I do not believe that it should be passed by the House. The motion agreed by the Committee referred to the need to protect the United Kingdom economy and the national health service, and to the interests of patients. Those interests are excluded from the wording of the motion on the Order Paper.

Mr. Deputy Speaker (Sir Paul Dean): I am grateful to the hon. Gentleman for giving me notice that he intended to raise the matter. He is perfectly correct to say that the motion before the House—No. 9 on the Order Paper—is not couched in the same terms as the resolution on the document agreed by the Standing Committee. I am assured that that is not a mistake. What is proposed is in order. There are two courses open to the hon. Gentleman: he can vote against the motion tonight, or he can submit any complaint that he may have about the wording of the motion to the Procedure Committee, which is currently examining this very matter.

Question put and agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) ( European Standing Committees).

ECOLOGICAL LABELLING (NO. 2)

That this House takes note of European Community Document No. 4717/91 and the supplementary explanatory


memorandum submitted by the Department of the Environment on 20th June 1991, relating to an environmental labelling scheme; endorses the Government's support for a voluntary scheme which would award labels on the basis of a cradle to grave assessment of products and set high standards of environmental protection; and supports the Governments's view that the scheme should be neither highly centralised nor complex to administer.—[Mr. Sackville.]

Orders of the Day — PETITIONS

Princess of Wales Hospital, Bridgend

Mr. Ray Powell: May I crave your indulgence Mr. Deputy Speaker, before I present the petition? These are perhaps the closing minutes of our proceedings—at least until tomorrow's day of Adjournment debates—and I may not be afforded a further opportunity to wish you, Sir, a happy, healthy and enjoyable recess. I have always had more admiration for you than for perhaps anyone else who has presided over our proceedings—from the Chair—because of your tolerance. I wish you a happy and enjoyable recess, and those wishes should be extended to all the staff of the House who work extremely hard for all hon. Members.

Mr. Deputy Speaker (Sir Paul Dean): Before the hon. Gentleman presents his petition, may I say how very much I appreciate his kind words. I am sure that all the staff of the House who serve us so well are equally appreciative.

Mr. Powell: Thank you, Mr. Deputy Speaker.
The petition is from residents of the catchment area of the Princess of Wales hospital, Bridgend, which includes the Ogmore, Bridgend, Aberavon, Pontypridd and Rhondda constituencies and covers some 250,000 people. It expresses grave concern that the population will not be afforded the necessary health care unless there is action to ensure that the necessary funding of promised future development is available on the capital expenditure plans of the area health authority. The excellent consultants and staff employed at the present hospital share this grave concern and the petition is signed by more than 5,000 people.
That petition from the residents of Ogwr is presented to the Honourable Commons of The United Kingdom of Great Britain and Northern Ireland in Parliament assembled The Humble Petition of the Residents of Ogwr Showeth:—
That it is proposed by the Mid-Glamorgan Health Authority to remove Phase II of the Princess of Wales Hospital from the 10 year capital programme despite assurances that Phase II would start when or soon after Phase I was completed in 1985 and that we the undersigned, protest vigorously at the failure of the Health Authority to complete the Princess of Wales Hospital to the detriment of patients and staff who are currently contending with the difficulties of providing care on split hospital sites.
Wherefore your petitioners pray that your honourable House do urge the Secretary of State for Wales to meet Mid Glamorgan Health Authority to discuss jointly the means by which Phase II of the Princess of Wales Hospital can be restored for the 10 year capital programme and work start on plans in 1991/92 as was intended this time last year.
And your petitioners as in duty bound will ever pray. The petition was signed by Muriel Williams of 6 Ogwy street, Nantymoel, and by more than 5,000 others.

To lie upon the Table.

Gipsy Caravan Site, Langlebury

Mr. Richard Page: Mr. Deputy Speaker, you know what a pleasure it is for me to present this petition to the House this evening. The petition is addressed to


the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
It states:
The Humble Petition of the residents of, and those having recreational, educational or commercial interests in, Langlebury and the surrounding area.
Sheweth
That it is proposed to provide a 15-pitch gypsy caravan site on Land at Langlebury Lane, Langlebury, Hertfordshire, and that we, the undersigned, vigorously protest against this proposal for the following reasons.
The reasons are that the land concerned is green belt land. The two councils involved, bearing in mind that the Caravan Sites Act was passed in 1968, have taken 23 years to reach a decision and the residents of Langlebury believe that the site is being imposed, without proper consideration or evaluation. Therefore, it seems wrong and undemocratic to permit the unsuitable development to be pursued on the basis of deeming planning consent and allegedly unsafe information supplied to the Department of the Environment without holding an independent inquiry.
The petition continues:
Wherefore your Petitioners pray that your Honourable House will urge the Secretary of State for Environment to restrain Hertfordshire County Council from proceeding with the aforementioned proposal unless and until:

1. The disputed statements made by Hertfordshire County Council regarding the following crucial points have been independently and impartially verified:

(a) The load-bearing capacity and settlement rate of the landfill on the alternative Tolpits Lane site with respect to its suitability to support gypsy site structures.
(b) The present attitude of the Tolpits Lane site with respect to the risk of flooding.
(c) the relative distances of the Tolpits Lane and Langlebury Lane sites from the nearest authentic social, medical and shopping facilities.
(d) The number of vehicles which have to mount the Langlebury Lane pavement (in school term time) because much of the roadway is too narrow for wide vehicles to pass.
(e) It is proved that the Langlebury Lane site falls within the 'urban' fringe category required by Hertfordshire County Council's own guidelines for siting gypsy camps.
2. An impartial and independent scrutiny of the above information, once verified, still leads to the conclusion that

the agricultural land at Langlebury Lane is more suitable than the spare land at Tolpits Lane for development of a permanent gypsy site.

And your Petitioners as in duty bound will ever pray etc.

To lie upon the Table.

Princess of Wales Hospital, Bridgend

Mr. Win Griffiths: I underline the wishes of my hon. Friend the Member for Ogmore (Mr. Powell) to you, Mr. Deputy Speaker, and the staff for a happy recess.
Like my hon. Friend, I am introducing a petition from the residents of Ogwr. As my hon. Friend mentioned, the constituency of Bridgend is in the catchment area of the Princess of Wales hospital. My petition has 5,000 signatures attached to it and it is a result of an initiative of the community health council. The petition contains the signatures of elected representatives of the Labour and Conservative parties, other parties, and of people of no political party in the Ogwr area. I have much pleasure in presenting the petition, which states:
To the Honourable Commons of The United Kingdom of Great Britain and Northern Ireland in Parliament Assembled.
The Humble Petition of the Residents of Ogwr Showeth:—
That it is proposed by the Mid Glamorgan Health Authority to remove Phase II of the Princess of Wales Hospital from the ten year capital programme despite assurances that Phase II would start when or soon after Phase I was completed in 1985 and that we the undersigned, protest vigorously at the failure of the Health Authority to complete the Princess of Wales Hospital to the detriment of patients and staff who are currently contending with the difficulties of providing care on split hospital sites.
Wherefore your petitioners pray that your honourable House do urge the Secretary of State for Wales to meet Mid Glamorgan Health Authority to discuss jointly the means by which Phase II of the Princess of Wales Hospital can be restored to the ten year capital programme and work start on plans in 1991/2 as was intended this time last year.
And your petitioners as in duty bound will ever pray.
The first name on the petition is that of Curwen Roberts of Coedmor, Cefn Cribwr, in the village in my constituency where I live.

To lie upon the Table.

A27 (Worthing)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sackville.]

Mr. Terence L. Higgins: I am very glad to have this opportunity of referring to the development of the A27 in the Worthing area and particularly the situation with regard to the preferred route which is being announced by the Government, a route which has been described by my constituents as a throughpass, not a bypass, and to put to the Minister the overwhelming case for having a real bypass. We have just had presented to the House several petitions. A petition of no fewer than 24,000 signatures was subscribed to by my constituents, arguing that the town should have a real bypass. That reflected the strength of public opinion on the issue.
The Minister and I are more fortunate this evening than we were when I raised the matter with his predecessor two years ago. On that occasion, we sat in the House all night considering the Consolidated Fund Bill before the matter came up at about 7.45 in the morning. I am glad to see the Minister in his place. On the previous occasion I pointed out that I had raised the matter with no fewer than 15 Ministers over the years. My hon. Friend the Minister must regard himself as the 16th.
I must say two things. First, I wonder whether I should provide a video to the relevant Ministers so that we could play back the arguments to them. Secondly, the constant succession of Ministers on the issue makes it very difficult to sustain the argument at a ministerial level. There is some danger of a "Yes, Minister" approach being adopted. The Minister has constantly changed but the bureaucrats, who throughout have been in favour of the preferred route, which I personally regard as highly objectionable, have managed to sustain their argument. One of my hon. Friend's many predecessors did, however, agree that a full traffic, environmental and economic assessment should be carried out before the public inquiry. I very much welcome that. It has been agreed that it will cover both the preferred route and the alternative route of a bypass. Perhaps my hon. Friend can tell me the likely timetable for the public inquiry.
A monitoring group has been set up, composed largely of members of the borough council, to consider the assessment of the alternative routes in conjunction with the Department. However, the members of the monitoring group have recently expressed their concern to me at the fact that, at a meeting on 16 July, they had considerable difficulty getting any information from the Department of Transport about exactly what was going on. There were rumours that additional land had been blighted and that blight notices had been issued, but no public statement to that effect has been made. Despite the complete confidentiality with which the monitoring group has been operating, it was denied any information.
There are rumours that a much more elaborate scheme on the preferred route is now being developed by Acer Consultants, who are charged with the responsibility of developing the detailed plans. Those rumours are now well founded. It seems that the expense of such a development on the preferred route will be very much greater than that which was originally envisaged. I believe that, in any case, the economics may be in favour of a bypass. That is increasingly apparent from the traffic surveys that have

been conducted. If that is so, my hon. Friend needs to spell out exactly what is now in mind, because it may be quite different from the plan for the preferred route that was outlined at the time of the original consultation exercise when my constituents were asked to express a view on the various alternatives. I hope that that can be borne in mind. I must stress that some doubts have recently been cast on the validity of that consultation. It is suggested that some of the junction improvements at Patching were already in the programme and that some of the alternatives that were put out for public consultation were not really available.
But be that as it may, as my hon. Friend well knows, because he has been sympathetic in receiving my representations on these matters, I am concerned about the situation that has developed in relation to the preferred route. Once the preferred route is announced, a number of people become affected, including those whose properties are not actually on the line of the preferred route and who are not, therefore, entitled under legislation to the blight notices that would enable them to sell if they wished to do so.
Clearly, however, the value of their property is seriously affected. It has become virtually impossible for them to sell because the announcement of the preferred route is well known. They suffer from a great many other inconveniences. It is true that legislation that the House has considered this Session will do something to help those who have blighted properties, but I have been concerned at the difficulty that many of my constituents—not those off the route, because they will be in a hopeless position for many years, but those on the route—have encountered in terms of getting adequate compensation. I have had much correspondence with successive Ministers on that point. There have been considerable problems with valuations.
However, what is really worrying about the A27 issue is that my constituents are increasingly convinced that they are being harassed to sell their properties so that most of them will have done so before the public inquiry. That has happened in several ways. Some of the letters state, "Although you have applied for a blight notice, you still have not come up with a specific proposal and must realise that the valuation that we have given you may not continue to be applicable," and so on. Such letters are clearly designed to encourage people to sell, whereas they are entitled to a blight notice and to remain in their homes until such time as they wish to exercise that blight notice.
Other people feel that the way in which the matter has been handled is designed to get them out of their homes. When, some 10 years ago, the Department bought the properties—the decision was subsequently reversed, and they were resold—no such problems arose. Some of the current difficulties have arisen because of unsuitable tenants. Properties have been let at uneconomic rents; that, too, did not happen before and I understand that it is no longer happening, but it has led to serious problems. People have felt very intimidated when disturbances have been created outside their homes and in some cases the police have been called in. I have visited the constituents who have been affected by these problems and they are clearly causing concern.
The Department used to manage the properties itself, but recently it has contracted the work to the North British Housing Association. Most of the cases involving unsatisfactory tenants have been under the auspices of the association, although in some instances the borough council was originally in charge. The association's


management of the properties appears not to have been adequate in other respects: some of the properties have been badly damaged. In one instance there was widespread flooding for a long time, as a result of which the adjoining house—they are semi-detached—has also been damaged. Clearly, the managers have been negligent.
My impression is that the pressure is on people to receive a blight notice, sell out and leave their homes, although they may wish to remain because they feel that in due course a sensible decision will be reached, a bypass will be built and there will be no need for them to leave.
Car repairs and enormous heaps of rubbish present further problems; I shall not go into the details, as my hon. Friend is familiar with them. Moreover, some houses that should have been looked after—they are, after all, the taxpayers' property now—have been boarded up. The general level of maintenance has declined, which has adversely affected both those living on the line of route who have decided to remain although they have received blight notices, and those in the adjoining area who have not even been given the option of receiving such a notice.
The situation has caused serious emotional problems. It also suggests that the money spent by the Government in purchasing the properties, and on repairing them when they have not been properly maintained, is imposing an unnecessary burden on the taxpayer. The experiment of employing outside organisations to look after the properties—for I gather that it is an experiment—has resulted in considerable suffering for individual constituents.
The basic feeling is that the aim is to clear the decks in advance of the public inquiry. If it is true that the preferred-route option will be much more expensive than previous options and that the cost to the Treasury will be much greater than was originally thought, the arguments for a proper bypass are surely overwhelming. It is not just a question of the traffic going from east to west. It is also a question of the traffic from the north going west or east and of the traffic from the east and west going north. That traffic need not come near the town. If the preferred route is sustained, it will continue to come to the main roundabout and go through a built-up area.
The Government's declared policy for many years has been to take traffic away from built-up areas and to provide bypasses. Everywhere along the south coast apart from Worthing has a proper bypass. Even small towns and villages have one. It is the only place where, instead of a bypass, we get a throughpass, which goes through a built-up area and many of the amenities. That is a serious matter, particularly for a town that relies considerably on tourism.
I pay tribute to the sympathetic approach of my hon. Friend in dealing with some of the personal problems that I have mentioned. I hope that he will carefully consider whether the time has now come to reconsider the preferred route. At the least, there must be a full assessment of the preferred route and the bypass route—the right one should go north of the Cissbury ring, not south of it—so that the public inquiry has a clear choice between the two routes.
One must see the position on the ground, both to understand the case for the bypass and to appreciate the immediate problems facing my constituents. I have raised this matter on several previous occasions and I am glad to have the opportunity of doing so now. The plight of individual constituents on or near the route concerned has deteriorated substantially. I hope that we shall now make

real progress in getting away from the preferred route and on to a bypass. If my hon. Friend would spare time to come in person, it could be a clear sign of the Government's concern to ameliorate the problems of traffic through Worthing in the short term for individuals and in the long term for my constituents.

The Minister for Roads and Traffic (Mr. Christopher Chope): It has become an almost regular annual event for my right hon. Friend the Member for Worthing (Mr. Higgins) to raise in the House the concerns which he and many of his constituents have about the proposed improvement to the A27 between Worthing and Lancing.
It was on 21 July 1989 that my hon. Friend the Member for Eltham (Mr. Bottomley), the then Minister for Roads and Traffic, announced the preferred route and in so doing stated that the task of selecting the right scheme for improving this section of the A27 had been extremely difficult. He recognised that the decision to choose a route through part of north Worthing would cause great concern to many people. My hon. Friend's prognosis has been more than borne out by subsequent events. In the debate on the summer Adjournment on 23 July last year, my right hon. Friend drew attention to some of the key issues which were then uppermost in the minds of his constituents.
Tonight, just over one year later, my right hon. Friend has drawn attention to the revisions to the detail of the preferred route which have resulted in some additional houses being blighted; to the problems which there have been with the management by the North British Housing Association of the properties which have been acquired on the route of the proposed road; and to the problems resulting from the length of time which has been taken to bring this scheme from the preferred route announcement to the stage where draft orders are published. I should try to deal with each of those issues in turn, but first let me say that I am looking forward to visiting my right hon. Friend's constituency to examine this further on the ground. I hope to visit shortly.
I will not trouble the House with the complex history of this scheme, which predates the announcement in July 1989 of the preferred route. Before making that announcement, four possible options were examined in detail. The routes were identified as the yellow or outer Findon route, the blue or Findon Gap route, the green or inner route with Lancing bypass, and the purple or inner route with an on-line at Lancing. The outer Findon route was rejected because it would involve a very long detour through the downs and would not attract sufficient traffic out of Worthing to justify the environmental impact on the downs and the estimated costs of construction. The purple route was rejected as having the severest impact upon people's homes. It would have involved the demolition of more than 200 properties and would also have been very expensive.
My right hon. Friend, together with Worthing borough council, has always been in favour of a full bypass option around Worthing to relieve homes in north Worthing. It is his view that, with suitable environmental protection measures such as the provision of tunnels, the bypass to the north would not have had an unacceptable impact upon the downs. The blue route option, however, which my right hon. Friend prefers, would still leave heavy traffic


flows on the existing road, so that conditions of people living alongside it would not be significantly improved and there would be a serious impact upon the south downs area of outstanding natural beauty which could not be sufficiently ameliorated to justify the loss of amenity involved.
For that reason, the green route was adopted as the preferred route, although I recognise that by adopting that route the Government could not achieve their normal preference for a full bypass solution. A full bypass, however, is not always the best solution and there are many examples up and down the country where a full bypass has to be rejected after making a balanced judgment on the different conflicting issues.
We recognise that the green route is strongly opposed, although it also fair to say that those who sent written responses to the Department following consultation were almost evenly split between those who favoured the green route—some 51 per cent.—and those who supported other alternatives. But because of the opposition, my right hon. Friend the Secretary of State has already announced that a public inquiry will be held to consider all the issues involved, including the various alternative options. To facilitate that process, the consultants who have been appointed to undertake the detailed design of the scheme, Acer Consultants Ltd., are currently in the process of undertaking a full traffic, environmental and economic analysis of both the green and the blue routes.
A ground investigation, due to begin on 29 July, will also cover both routes. West Sussex county council, Worthing borough council and Adur and Arun district councils are represented on a monitoring group to oversee the preparation of these assessments. The aim of that local authority monitoring group is to reach agreement on matters of fact, such as traffic data, so that the inquiry inspector can concentrate on considering the arguments for and against the preferred option, compared with alternatives that may be put forward.
Work on the detailed design of the preferred route is currently under way with a view to publishing draft orders for the scheme in the spring next year. The traffic, environmental and economic assessment of both the blue and the green routes will be published at the same time. The public inquiry will take place about six months later, which I hope will allow sufficient time for all the parties concerned to study and comment on the assessment results.

Mr. Higgins: In my hon. Friend's earlier remarks, he referred to revision of the plan for the preferred route. There have been widespread rumours that that proposal has been radically changed, but the public have no knowledge of that change. If it is radically changed, that would alter the position of the earlier consultation, which was carried out on the basis of a relatively—although still appalling—junction at the point where the A24 and the A27 meet. If that is changed on a larger scale, as seems to be indicated by the fact that more properties that have become blighted now have to be purchased, the whole consultation must be reconsidered.

Mr. Chope: I intend to deal with my hon. Friend's point, but first may I finish dealing with the issue relating to the public inquiry.
If, in the meantime, the assessment results were to indicate a better route than our preferred green option, I assure my right hon. Friend that the Department would reconsider its position before a public inquiry. Obviously, that would be the prudent and sensible thing to do.
Detailed design work on the scheme is currently under way and, in that connection, Acer Consultants have refined the scheme that was put forward by the previous consultants, Howard Humphries. In doing so, a small number of additional properties have been identified as possibly being affected by the scheme. I assure my right hon. Friend that the preferred route has not been changed, but that minor adjustments have been made to it as detailed design work has continued. The centre line of the preferred route has remained the same, but detailed design work made it clear that the route would impinge upon properties that it had been thought it would not affect.
Although it is not possible to give a final number of properties likely to be required for the scheme, it seems that about 127 could be affected. However, that is by no means certain and in any event not all 127, or whatever the final number, will have to be demolished. The Department is willing to acquire properties even when only part of the holding may be affected by the route. That is the background to the recent letters that the Department sent to some eight property owners—and this is probably the basis of the rumours to which my right hon. Friend referred—who had originally made blight applications which were rejected. They have now received letters from the Department inviting them to submit fresh blight applications because it is quite clear on closer consideration that their properties may be blighted as a result of this route.
I emphasise that that is not being done by the Department to try to harass those occupants into giving their properties to the Department. It is to try to be fair to them. I emphasise, as did my right hon. Friend, that a blight application can be accepted without any commitment on the part of the vendor to sell the property to the Department before the result of the public inquiry.
I strongly emphasise that there is no prejudging of the issue. Some people say that their properties are blighted and that they cannot be expected to live with the uncertainty until the outcome of the public inquiry. In the interim, they seek some redress. Others quite understandably say that they have been living in these houses for many years and have no intention of giving them up. Whether the properties are blighted or not, the occupants hope that when the inspector has considered all the evidence he will conclude that the Department's preferred route is wrong and that the route promoted by my right hon. Friend or a similar one should ultimately be accepted.
My right hon. Friend drew attention to the failings of the North British Housing Association in the management of some of the properties for which it is responsible along the line of the proposed road. The background to that is that, as a result of a scrutiny by the Department, it was thought that it would be more efficient for the management of properties acquired by the Department pending the detailed consideration of road schemes by an inquiry, to be in the hands of a housing association or some other specialist agent rather than in the hands of the Department. The Department sensibly responded to that scrutiny by inviting tenders for the management of our properties in various areas, including those in Worthing.
I have shared with my right hon. Friend my concerns on this matter, and I am pleased to say that there has been a significant improvement in the performance of the North British Housing Association. During the past three to four months, it has reduced the wholly unacceptable backlog of empty properties awaiting tenants. At present, of the 90 properties in the Department's ownership, only nine are empty. Two of those are being relet, three are in the process of being brought back into a habitable state before letting, and four have been acquired only very recently. The Department has also accepted blight notices in respect of a further 13 properties, although we do not think that all those will actually have to be acquired by the Department in the immediate future.
My right hon. Friend will be pleased to hear that, without the need to proceed through the courts, the housing association has already obtained vacant possession of two of the three properties in which we had identified serious breaches of our tenancy agreements which had given rise to complaints from neighbouring residents—art issue that my right hon. Friend has raised with me at more than one meeting.
A court hearing in respect of the remaining property has been fixed for 14 August. When reletting property or placing new tenants, the housing association has been asked to pay particular attention to the selection of suitable families to avoid this type of problem in the future.
The North British Housing Association was given three months from 1 June to 1 September this year in which to demonstrate that it could improve its performance beyond

that which it had achieved before. There is already some evidence of an improvement, but as my right hon. Friend has made clear in this debate, it is not possible yet to describe the situation as ideal. I assure my right hon. Friend that the performance of the North British Housing Association will be critically examined at the end of that three-month review period on 1 September. In the meantime, the housing association has indicated its willingness, in conjunction with the Department, to meet representatives of local opinion to discuss matters of common concern, and I understand that that offer remains open.
Everyone is agreed that the A27 between Worthing and Lancing is in desperate need of improvement. Many other parts of the A27 and A259 have been or are already being improved as part of the Government strategy to provide a high-quality route between Southampton and Dover. I fully understand the frustration caused by the delay in progressing the scheme. But I hope that in this short debate I have been able to allay the concerns of my right hon. Friend and his constituents about the objectivity with which this issue is being addressed so that when the public inquiry comes, the inspector is as far as possible able to draw conclusions from an agreed set of facts. In the meantime, I look forward to meeting my right hon. Friend in his constituency very shortly and to discussing any other issues arising in more detail.

Question put and agreed to.

Adjourned accordingly at ten minutes past Eleven o'clock.